MAGNUM HUNTER RESOURCES, INC.,
                                    as Issuer

                                       and

                     THE SUBSIDIARY GUARANTORS named herein

                                       and

                             Bankers Trust Company,
                                   as Trustee

                            -------------------------

                                    INDENTURE

                           Dated as of March 15, 2002

                             ----------------------




                     9.60 % Senior Notes due 2012, Series A

                     9.60 % Senior Notes due 2012, Series B

<PAGE>

                              CROSS-REFERENCE TABLE

  TIA                                                  Indenture
Section                                                 Section
-------                                                ---------

310   (a)(1)...........................................  7.10
      (a)(2)...........................................  7.10
      (a)(3)...........................................  N.A.
      (a)(4)...........................................  N.A.
      (a)(5)...........................................  7.08; 7.10
      (b)..............................................  7.03; 7.08; 7.10; 11.02
      (c)..............................................  N.A.
311   (a)..............................................  7.11
      (b)..............................................  7.11
      (c)..............................................  N.A.
312   (a)..............................................  2.05
      (b)..............................................  11.03
      (c)..............................................  11.03
313   (a)..............................................  7.06
      (b)(1)...........................................  N.A.
      (b)(2)...........................................  7.06
      (c)..............................................  7.06; 11.02
      (d)..............................................  7.06
314   (a)..............................................  4.06; 4.08
      (b)..............................................  N.A.
      (c)(1)...........................................  11.04
      (c)(2)...........................................  11.04
      (c)(3)...........................................  N.A.
      (d)..............................................  N.A.
      (e)..............................................  11.05
      (f)..............................................  N.A.
315   (a)..............................................  7.01(b)
      (b)..............................................  7.05
      (c)..............................................  7.01(a)
      (d)..............................................  7.01(c)
      (e)..............................................  6.11
316   (a)(last sentence)...............................  2.09
      (a)(1)(A)........................................  6.05
      (a)(1)(B)........................................  6.04
      (a)(2)...........................................  N.A.
      (b)..............................................  6.07
      (c)..............................................  9.04
317   (a)(1)...........................................  6.08
      (a)(2)...........................................  6.09
      (b)..............................................  2.04
318   (a)..............................................  11.01
      (b)..............................................  N.A.
      (c)..............................................  11.01
----------------------
N.A. means Not Applicable

     NOTE: This  Cross-Reference  Table shall not, for any purpose, be deemed to
be a part of the Indenture.

                                      -i-
<PAGE>

                                TABLE OF CONTENTS

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                                                                                                            Page

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.           Definitions...........................................................................1
SECTION 1.02.           Incorporation by Reference of TIA....................................................26
SECTION 1.03.           Rules of Construction................................................................26

                                   ARTICLE TWO

                                    THE NOTES

SECTION 2.01.           Form and Dating......................................................................27
SECTION 2.02.           Execution and Authentication; Aggregate Principal Amount.............................28
SECTION 2.03.           Registrar and Paying Agent...........................................................29
SECTION 2.04.           Paying Agent To Hold Assets in Trust.................................................29
SECTION 2.05.           Holder Lists.........................................................................30
SECTION 2.06.           Transfer and Exchange................................................................30
SECTION 2.07.           Replacement Notes....................................................................30
SECTION 2.08.           Outstanding Notes....................................................................31
SECTION 2.09.           Treasury Notes.......................................................................31
SECTION 2.10.           Temporary Notes......................................................................31
SECTION 2.11.           Cancellation.........................................................................32
SECTION 2.12.           Defaulted Interest...................................................................32
SECTION 2.13.           CUSIP Number.........................................................................33
SECTION 2.14.           Deposit of Monies....................................................................33
SECTION 2.15.           Restrictive Legends..................................................................33
SECTION 2.16.           Book-Entry Provisions for Global Security............................................35
SECTION 2.17.           Special Transfer Provisions..........................................................36
SECTION 2.18.           Additional Interest Under Registration Rights Agreement..............................39
SECTION 2.19.           Designation..........................................................................39

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.           Notices to Trustee...................................................................39
SECTION 3.02.           Selection of Notes To Be Redeemed....................................................39
SECTION 3.03.           Optional Redemption..................................................................40
SECTION 3.04.           Notice of Redemption.................................................................40
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                                      -ii-
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SECTION 3.05.           Effect of Notice of Redemption.......................................................41
SECTION 3.06.           Deposit of Redemption Price..........................................................41
SECTION 3.07.           Notes Redeemed in Part...............................................................42

                                  ARTICLE FOUR

                                    COVENANTS

SECTION 4.01.           Payment of Notes.....................................................................42
SECTION 4.02.           Maintenance of Office or Agency......................................................42
SECTION 4.03.           Corporate Existence..................................................................43
SECTION 4.04.           Payment of Taxes and Other Claims....................................................43
SECTION 4.05.           Maintenance of Properties and Insurance..............................................43
SECTION 4.06.           Compliance Certificate; Notice of Default............................................44
SECTION 4.07.           Compliance with Laws.................................................................44
SECTION 4.08.           Reports to Holders...................................................................45
SECTION 4.09.           Waiver of Stay, Extension or Usury Laws..............................................45
SECTION 4.10.           Limitation on Restricted Payments....................................................45
SECTION 4.11.           Limitations on Transactions with Affiliates..........................................48
SECTION 4.12.           Limitation on Incurrence of Additional Indebtedness..................................48
SECTION 4.13.           Limitation on Dividend and Other Payment Restrictions
                        Affecting Restricted Subsidiaries....................................................49
SECTION 4.14.           Limitation on Restricted and Unrestricted Subsidiaries...............................50
SECTION 4.15.           Change of Control....................................................................52
SECTION 4.16.           Limitation on Asset Sales............................................................54
SECTION 4.17.           Limitation on Preferred Stock of Restricted Subsidiaries.............................57
SECTION 4.18.           Limitation on Liens..................................................................57
SECTION 4.19.           Limitation on Conduct of Business....................................................57
SECTION 4.20.           Additional Subsidiary Guarantees.....................................................58

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

SECTION 5.01.           Merger, Consolidation and Sale of Assets.............................................58
SECTION 5.02.           Successor Corporation Substituted....................................................60

                                   ARTICLE SIX

                                    REMEDIES

SECTION 6.01.           Events of Default....................................................................60
SECTION 6.02.           Acceleration.........................................................................62
SECTION 6.03.           Other Remedies.......................................................................63
SECTION 6.04.           Waiver of Past Defaults..............................................................63

</TABLE>

                                     -iii-
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SECTION 6.05.           Control by Majority..................................................................63
SECTION 6.06.           Limitation on Suits..................................................................63
SECTION 6.07.           Right of Holders To Receive Payment..................................................64
SECTION 6.08.           Collection Suit by Trustee...........................................................64
SECTION 6.09.           Trustee May File Proofs of Claim.....................................................64
SECTION 6.10.           Priorities...........................................................................65
SECTION 6.11.           Undertaking for Costs................................................................65
SECTION 6.12.           Restoration of Rights and Remedies...................................................65

                                  ARTICLE SEVEN

                                     TRUSTEE

SECTION 7.01.           Duties of Trustee....................................................................66
SECTION 7.02.           Rights of Trustee....................................................................67
SECTION 7.03.           Individual Rights of Trustee.........................................................68
SECTION 7.04.           Trustee's Disclaimer.................................................................68
SECTION 7.05.           Notice of Default....................................................................68
SECTION 7.06.           Reports by Trustee to Holders........................................................68
SECTION 7.07.           Compensation and Indemnity...........................................................69
SECTION 7.08.           Replacement of Trustee...............................................................70
SECTION 7.09.           Successor Trustee by Merger, Etc.....................................................70
SECTION 7.10.           Eligibility; Disqualification........................................................71
SECTION 7.11.           Preferential Collection of Claims Against the Company................................71
SECTION 7.12.           Force Majeure........................................................................71

                                  ARTICLE EIGHT

                       DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.           Termination of Company's Obligations.................................................71
SECTION 8.02.           Application of Trust Money...........................................................73
SECTION 8.03.           Repayment to the Company.............................................................74
SECTION 8.04.           Reinstatement........................................................................74
SECTION 8.05.           Acknowledgment of Discharge by Trustee...............................................74

                                  ARTICLE NINE

                          MODIFICATION OF THE INDENTURE

SECTION 9.01.           Without Consent of Holders...........................................................75
SECTION 9.02.           With Consent of Holders..............................................................75
SECTION 9.03.           Compliance with Trust Indenture Act..................................................76
SECTION 9.04.           Revocation and Effect of Consents....................................................76
SECTION 9.05.           Notation on or Exchange of Notes.....................................................76

</TABLE>

                                      -iv-

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SECTION 9.06.           Trustee To Sign Amendments, Etc......................................................77

                                   ARTICLE TEN

                             [INTENTIONALLY OMITTED]


                                 ARTICLE ELEVEN

                                  MISCELLANEOUS

SECTION 11.01.          TIA Controls.........................................................................77
SECTION 11.02.          Notices..............................................................................77
SECTION 11.03.          Communications by Holders with Other Holders.........................................78
SECTION 11.04.          Certificate and Opinion as to Conditions Precedent...................................79
SECTION 11.05.          Statements Required in Certificate or Opinion........................................79
SECTION 11.06.          Rules by Trustee, Paying Agent, Registrar............................................79
SECTION 11.07.          Legal Holidays.......................................................................79
SECTION 11.08.          Governing Law........................................................................80
SECTION 11.09.          No Adverse Interpretation of Other Agreements........................................80
SECTION 11.10.          No Personal Liability................................................................80
SECTION 11.11.          Successors...........................................................................80
SECTION 11.12.          Duplicate Originals..................................................................80
SECTION 11.13.          Severability.........................................................................80
SECTION 11.14.          Independence of Covenants............................................................81

                                 ARTICLE TWELVE

                               GUARANTEE OF NOTES

SECTION 12.01.          Unconditional Guarantee..............................................................81
SECTION 12.02.          Limitations on Guarantees............................................................82
SECTION 12.03.          Execution and Delivery of Guarantee..................................................82
SECTION 12.04.          Release of a Subsidiary Guarantor....................................................83
SECTION 12.05.          Waiver of Subrogation................................................................84
SECTION 12.06.          Immediate Payment....................................................................84
SECTION 12.07.          No Set-Off...........................................................................84
SECTION 12.08.          Obligations Absolute.................................................................84
SECTION 12.09.          Obligations Continuing...............................................................85
SECTION 12.10.          Obligations Not Reduced..............................................................85
SECTION 12.11.          Obligations Reinstated...............................................................85
SECTION 12.12.          Obligations Not Affected.............................................................85
SECTION 12.13.          Waiver...............................................................................87
SECTION 12.14.          No Obligation To Take Action Against the Company.....................................87
SECTION 12.15.          Dealing with the Company and Others..................................................87
</TABLE>

                                      -v-

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SECTION 12.16.          Default and Enforcement..............................................................88
SECTION 12.17.          Amendment, Etc.......................................................................88
SECTION 12.18.          Acknowledgment.......................................................................88
SECTION 12.19.          Costs and Expenses...................................................................88
SECTION 12.20.          No Merger or Waiver; Cumulative Remedies.............................................88
SECTION 12.21.          Survival of Obligations..............................................................88
SECTION 12.22.          Guarantee in Addition to Other Obligations...........................................89
SECTION 12.23.          Severability.........................................................................89
SECTION 12.24.          Successors and Assigns...............................................................89

</TABLE>

                                      -vi-
<PAGE>

     INDENTURE, dated as of March 15, 2002, among Magnum Hunter Resources, Inc.,
a Nevada  corporation  (the  "Company"),  the Subsidiary  Guarantors and Bankers
Trust Company, as Trustee (the "Trustee").

     The Company has duly  authorized  the creation of an issue of 9.60 % Senior
Notes due 2012, Series A (the "Initial Notes") and 9.60 % Senior Notes due 2012,
Series  B to be  issued  in  exchange  for the  Initial  Notes  pursuant  to the
Registration  Rights  Agreement (as defined  herein) (the "Exchange  Notes" and,
together  with the Initial  Notes,  the "Notes") and, to provide  therefor,  the
Company has duly  authorized the execution and delivery of this  Indenture.  The
Notes will be guaranteed on a senior basis by each of the Subsidiary Guarantors.
All things  necessary  to make the Notes,  when duly issued and  executed by the
Company, and authenticated and delivered hereunder, the valid obligations of the
Company,  and to make  this  Indenture  a valid  and  binding  agreement  of the
Company, have been done.

     Each party  hereto  agrees as follows for the benefit of the other  parties
and for the equal and ratable benefit of the Holders of the Notes.


                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE


                           SECTION 1.01. Definitions.
                                         -----------

     "Acquired  Indebtedness"  means  Indebtedness  of a  Person  or  any of its
Subsidiaries  (1)  existing  at  the  time  such  Person  becomes  a  Restricted
Subsidiary or at the time it merges or  consolidates  with the Company or any of
its Restricted  Subsidiaries or (2) which becomes Indebtedness of the Company or
a Restricted  Subsidiary in connection  with the acquisition of assets from such
Person,  in each case not incurred in  connection  with, or in  anticipation  or
contemplation  of,  such  Person  becoming  a  Restricted   Subsidiary  or  such
acquisition, merger or consolidation.

     "Additional  Interest" shall have the meaning set forth in the Registration
Rights Agreement.

     "Additional  Notes" means Notes, in addition to, and having identical terms
as, the $300,000,000  aggregate principal amount of Series A Notes issued on the
Issue  Date (or the  Series B Notes  issued in  exchange  for the Series A Notes
issued on the Issue Date),  issued pursuant to Article II and in compliance with
Section 4.12.

     "Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination:

     (1) the sum of:

<page>

                                      -2-

     (a) discounted  future net revenues from proved oil and gas reserves of the
Company  and  its  consolidated  Subsidiaries,  calculated  in  accordance  with
Commission  guidelines (before any state or federal income tax), as estimated by
a nationally  recognized firm of independent petroleum engineers as of a date no
earlier than the date of the  Company's  latest  annual  consolidated  financial
statements,  as increased  by, as of the date of  determination,  the  estimated
discounted future net revenues from:

     (i) estimated  proved oil and gas reserves  acquired since the date of such
year-end reserve report; and

     (ii)  estimated oil and gas reserves  attributable  to upward  revisions of
estimates of proved oil and gas reserves since the date of such year-end reserve
report due to exploration, development or exploitation activities,

     in each of cases (i) and (ii)  calculated  in  accordance  with  Commission
guidelines  (utilizing the prices utilized in such year-end reserve report), and
decreased by, as of the date of determination,  the estimated  discounted future
net revenues from:

     (iii) estimated  proved oil and gas reserves  produced or disposed of since
the date of such year-end reserve report, and

     (iv) estimated oil and gas reserves  attributable to downward  revisions of
estimates of proved oil and gas reserves since the date of such year-end reserve
report due to changes in geological  conditions or other factors which would, in
accordance with standard industry practice, cause such revisions,

     in each of cases (iii) and (iv)  calculated in accordance  with  Commission
guidelines  (utilizing  the prices  utilized in such year-end  reserve  report);
provided, however, that, in the case of each of the determinations made pursuant
to clauses (i) through (iv),  such increases and decreases shall be as estimated
by the  Company's  petroleum  engineers,  unless  in the event  that  there is a
Material  Change as a result of such  acquisitions,  dispositions  or revisions,
then the  discounted  future net  revenues  utilized for purposes of this clause
(1)(a)  shall be  confirmed  in  writing,  by a  nationally  recognized  firm of
independent   petroleum  engineers  (which  may  be  the  Company's  independent
petroleum engineers who prepare the Company's annual reserve report); plus

     (b) the capitalized  costs that are  attributable to oil and gas properties
of the Company and its  Subsidiaries to which no proved oil and gas reserves are
attributable,  based on the Company's  books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial  statements;
plus

     (c) the Net  Working  Capital  on a date no  earlier  than  the date of the
Company's latest consolidated annual or quarterly financial statements; plus

<page>

                                      -3-

     (d)  with  respect  to each  other  tangible  asset of the  Company  or its
consolidated Restricted  Subsidiaries,  specifically  including,  but not to the
exclusion  of  any  other  qualifying  tangible  assets,  the  Company's  or its
consolidated  Restricted  Subsidiaries,  gas gathering and processing facilities
and unproved oil and gas properties  (less any remaining  deferred  income taxes
which have been allocated to such gas processing  facilities in connection  with
the acquisition thereof), land, equipment,  leasehold improvements,  investments
carried  on the  equity  method,  restricted  cash  and the  carrying  value  of
marketable  securities,  the  greater  of (i) the net book  value of such  other
tangible  asset  on a date no  earlier  than the  date of the  Company's  latest
consolidated  annual or quarterly  financial  statements  or (ii) the  appraised
value, as estimated by a qualified  Independent  Advisor, of such other tangible
assets of the Company and its Restricted  Subsidiaries,  as of a date no earlier
than the date of the Company's latest audited financial statements; minus

     (2) minority  interests and, to the extent not otherwise taken into account
in determining  Adjusted  Consolidated  Net Tangible  Assets,  any gas balancing
liabilities  of  the  Company  and  its  consolidated   Restricted  Subsidiaries
reflected in the Company's latest audited financial statements.  In addition to,
but without  duplication  of, the  foregoing,  for purposes of this  definition,
"Adjusted  Consolidated  Net Tangible  Assets" shall be calculated  after giving
effect,  on a pro forma basis,  to (A) any  Investment  not  prohibited  by this
Indenture,  to and including the date of the transaction giving rise to the need
to calculate Adjusted  Consolidated Net Tangible Assets (the "Assets Transaction
Date"),  in any other Person  that,  as a result of such  Investment,  becomes a
Restricted Subsidiary of the Company, (B) the acquisition,  to and including the
Assets  Transaction  Date (by  merger,  consolidation  or  purchase  of stock or
assets), of any business or assets,  including,  without  limitation,  Permitted
Industry  Investments,  and  (C) any  sales  or  other  dispositions  of  assets
permitted by this Indenture  (other than sales of  Hydrocarbons or other mineral
products in the ordinary course of business) occurring on or prior to the Assets
Transaction Date.

     "Affiliate"  means,  with respect to any  specified  Person,  (a) any other
Person who directly or indirectly through one or more  intermediaries  controls,
or is controlled by, or under common control with, such specified Person and (b)
any Related  Person of such Person.  The term  "control"  means the  possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  and policies of a Person,  whether  through the  ownership of voting
securities,   by  contract  or  otherwise;   and  the  terms  "controlling"  and
"controlled" have meanings correlative of the foregoing.

     "Affiliate Transaction" has the meaning provided in Section 4.11.

     "Agent" means any Registrar, Paying Agent or co-Registrar.

     "Agent Members" has the meaning provided in Section 2.16.

     "Asset  Acquisition"  means  (1)  an  Investment  by  the  Company  or  any
Restricted  Subsidiary  in any other Person  pursuant to which such Person shall
become a Restricted  Subsidiary,  or shall be merged with or into the Company or
any  Restricted  Subsidiary,  or  (2)  the  acquisition  by the  Company  or any
Restricted  Subsidiary  of the assets of any  Person  (other  than a  Restricted
Subsidiary)

<page>

                                      -4-

     which constitute all or  substantially  all of the assets of such Person or
comprises any division or line of business of such Person.

     "Asset  Sale"  means any direct or  indirect  sale,  issuance,  conveyance,
transfer,  exchange,  lease  (other than  operating  leases  entered into in the
ordinary  course of  business),  assignment  or other  transfer for value by the
Company or any of its Restricted  Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of:

     (1) any Capital Stock of any Restricted Subsidiary; or

     (2) any other property or assets  (including any interests  therein) of the
Company or any Restricted  Subsidiary,  including any  disposition by means of a
merger, consolidation or similar transaction;

     provided, however, that Asset Sales shall not include:

     (a) the sale,  lease,  conveyance,  disposition or other transfer of all or
substantially all of the assets of the Company in a transaction which is made in
compliance with the provisions of Section 5.01;

     (b)  any  Investment  in  an  Unrestricted  Subsidiary  which  is  made  in
compliance with the provisions of Section 4.10;

     (c) disposals or replacements of obsolete  equipment in the ordinary course
of business;

     (d) the sale,  lease,  conveyance,  disposition or other transfer  (each, a
"Transfer") by the Company or any Restricted Subsidiary of assets or property to
the Company or one or more Restricted Subsidiaries;

     (e) any disposition of Hydrocarbons or other mineral  products for value in
the ordinary course of business;

     (f) any Transfer of an interest in an oil, gas or mineral property pursuant
to a farm-out,  farm-in,  joint operation,  area of mutual interest agreement or
other  similar or customary  arrangement  or  agreement  that the Company or any
Restricted  Subsidiary determines in good faith to be necessary for the economic
development of such Property; and

     (g) the Transfer by the Company or any  Restricted  Subsidiary of assets or
property  in the  ordinary  course  of  business;  provided,  however,  that the
aggregate  amount (valued at the fair market value of such assets or property at
the time of such Transfer) of all such assets and property  Transferred pursuant
to this  clause (g) shall not  exceed  $5.0  million  in any fiscal  year of the
Company.

     "Authenticating Agent" has the meaning provided in Section 2.02.

<page>

                                      -5-

     "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.

     "Board of Directors"  means,  as for any Person,  the board of directors of
such Person or any duly authorized committee thereof.

     "Board  Resolution"  means,  with  respect  to  any  Person,  a  copy  of a
resolution  certified by the Secretary or an Assistant  Secretary of such Person
to have been duly  adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such  certification,  and  delivered to the
Trustee.

     "Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in the City of New York are required or authorized
by law or other governmental action to be closed.

     "Capital Stock" means:

     (1) with respect to any Person that is a  corporation,  any and all shares,
interests,  participations or other equivalents  (however designated and whether
or not voting) of  corporate  stock,  including  each class of Common  Stock and
Preferred Stock of such Person and including any warrants,  options or rights to
acquire  any  of  the  forgoing  and  instruments  convertible  into  any of the
foregoing; and

     (2) with  respect  to any  Person  that is not a  corporation,  any and all
partnership  or  other  equity  interests  of such  Person.  "Capitalized  Lease
Obligation"  means, as to any Person, the discounted present value of the rental
obligations  of such Person under a lease of (or other  agreement  conveying the
right to use) any property (whether real, personal or mixed) that is required to
be classified  and  accounted  for as a capital  lease  obligation at such date,
determined in accordance with GAAP.

     "Cash Equivalents" means:

     (1) marketable direct obligations issued by, or unconditionally  guaranteed
by, the United States  Government or issued by any agency  thereof and backed by
the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;

     (2) marketable direct  obligations issued by any state of the United States
of  America  or any  political  subdivision  of any  such  state  or any  public
instrumentality  thereof  maturing  within one year from the date of acquisition
thereof and, at the time of  acquisition,  having one of the two highest ratings
obtainable from S&P or Moody's;

     (3)  commercial  paper  maturing  no more  than one  year  from the date of
creation  thereof and, at the time of  acquisition,  having a rating of at least
A-1 from S&P or at least P-1 from Moody's;

<page>

                                      -6-

     (4)  certificates  of deposit or bankers'  acceptances  maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United  States of America or any state  thereof or the  District  of
Columbia  or any United  States  branch of a foreign  bank having at the date of
acquisition  thereof  combined  capital  and  surplus  of not less  than  $250.0
million;

     (5)  repurchase  obligations  with a term of not more than  seven  days for
underlying  securities  of the types  described in clause (1) above entered into
with any bank meeting the qualifications specified in clause (4) above; and

     (6) money market  mutual or similar funds having assets in excess of $100.0
million.

     "Change of Control"  means the  occurrence  of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person (a  "Transferee") or group of related Persons for purposes
of Section  13(d) of the Exchange Act (a "Group")  (whether or not  otherwise in
compliance with the provisions of this Indenture),  but excluding any such sale,
lease,  exchange or other transfer as part of a transaction  in compliance  with
Section 5.01 if the holders of the Company's  Capital Stock immediately prior to
such  transaction own at least a majority (by voting power) of the Capital Stock
of such Transferee  immediately after such transaction;  (b) the approval by the
holders  of  Capital  Stock  of the  Company  of any  plan or  proposal  for the
liquidation  or  dissolution  of  the  Company  (whether  or  not  otherwise  in
compliance with the provisions of this Indenture); (c) any Person or Group shall
become the owner,  directly or indirectly,  beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding  Capital Stock of the Company; or (d) the replacement
of a majority of the Board of Directors  of the Company  over a two-year  period
from the directors who  constituted the Board of Directors of the Company at the
beginning of such period with directors  whose  replacement  shall not have been
approved (by  recommendation,  nomination or election,  as the case may be) by a
vote of at least a majority of the Board of  Directors of the Company then still
in office who either were members of such Board of Directors at the beginning of
such  period  or whose  election  as a member  of such  Board of  Directors  was
previously so approved.

     "Change of Control Offer" has the meaning provided in Section 4.15.

     "Change of Control Payment Date" has the meaning provided in Section 4.15.

     "Commission" means the Securities and Exchange Commission.

     "Common  Stock" of any Person means any and all shares,  interests or other
participations in, and other equivalents  (however designated and whether voting
or non-voting) of such Person's common stock,  whether  outstanding on the Issue
Date or issued  after the Issue Date,  and  includes,  without  limitation,  all
series and classes of such common stock.

     "Company Properties" means all Properties, and equity, partnership or other
ownership  interests  therein,  that are  related or  incidental  to, or used or
useful in connection  with, the

<page>

                                       -7-

     conduct or  operation  of any  business  activities  of the  Company or the
Subsidiaries,  which business activities are not prohibited by the terms of this
Indenture.

     "Consolidated  EBITDA" means, for any period, the sum (without duplication)
of:

     (1) Consolidated Net Income; and

     (2) to the extent Consolidated Net Income has been reduced thereby:

     (a) all income taxes of the Company and its Restricted Subsidiaries paid or
accrued  in  accordance  with GAAP for such  period  (other  than  income  taxes
attributable to extraordinary,  unusual or nonrecurring gains or losses or taxes
attributable to sales or dispositions outside the ordinary course of business);

     (b) Consolidated Interest Expense;

     (c) the amount of any Preferred Stock dividends paid by the Company and its
Restricted Subsidiaries; and

     (d)  Consolidated  Non-cash  Charges,  less any non-cash  items  increasing
Consolidated  Net Income for such period,  all as determined  on a  consolidated
basis for the Company and its Restricted Subsidiaries in accordance with GAAP.

     "Consolidated  EBITDA Coverage  Ratio" means,  with respect to the Company,
the ratio of  Consolidated  EBITDA of the  Company  during the four full  fiscal
quarters for which  financial  information in respect  thereof is available (the
"Four Quarter Period") ending on or prior to the date of the transaction  giving
rise to the need to  calculate  the  Consolidated  EBITDA  Coverage  Ratio  (the
"Transaction  Date") to  Consolidated  Fixed Charges of the Company for the Four
Quarter  Period.  In addition to and without  limitation of the  foregoing,  for
purposes  of this  definition,  "Consolidated  EBITDA" and  "Consolidated  Fixed
Charges" shall be calculated after giving effect (without  duplication) on a pro
forma basis for the period of such calculation to:

     (1) the incurrence or repayment of any  Indebtedness  of the Company or any
of its Restricted  Subsidiaries  (and the  application of the proceeds  thereof)
giving rise to the need to make such calculation and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof),  other than
the incurrence or repayment of  indebtedness  in the ordinary course of business
for working capital purposes pursuant to working capital  facilities,  occurring
during the Four Quarter Period or at any time  subsequent to the last day of the
Four  Quarter  Period  and on or  prior  to the  Transaction  Date,  as if  such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period; and

     (2) any Asset Sales or Asset Acquisitions  (including,  without limitation,
any Asset  Acquisition  giving  rise to the need to make such  calculation  as a
result of the  Company  or one of its  Restricted  Subsidiaries  (including  any
Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring,  assuming or otherwise  being liable

<PAGE>

                                      -8-

     for Acquired  Indebtedness,  and also including,  without  limitation,  any
Consolidated  EBITDA  attributable  to the assets  which are the  subject of the
Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during
the Four Quarter  Period or at any time  subsequent  to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset  Acquisition  (including the  incurrence,  assumption or liability for any
such  Acquired  Indebtedness)  occurred  on the  first  day of the Four  Quarter
Period.

     If the Company or any of its Restricted Subsidiaries directly or indirectly
guarantees  Indebtedness  of a third Person,  the preceding  sentence shall give
effect to the incurrence of such  guaranteed  Indebtedness  as if the Company or
the  Restricted  Subsidiary,  as the  case  may be,  had  directly  incurred  or
otherwise assumed such guaranteed Indebtedness.

     Furthermore,  in calculating  "Consolidated  Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated EBITDA
Coverage Ratio:"

     (1) interest on outstanding  Indebtedness determined on a fluctuating basis
as of  the  Transaction  Date  and  which  will  continue  to  be so  determined
thereafter  shall be deemed to have  accrued at a fixed rate per annum  equal to
the rate of interest on such Indebtedness in effect on the Transaction Date;

     (2) if interest on any  Indebtedness  actually  incurred on the Transaction
Date may  optionally  be determined at an interest rate based upon a factor of a
prime or similar rate, a  eurocurrency  interbank  offered rate, or other rates,
then the interest rate in effect on the Transaction  Date will be deemed to have
been in effect during the Four Quarter Period;

     (3)  notwithstanding  clauses (1) and (2) above,  interest on  Indebtedness
determined  on a  fluctuating  basis,  to the extent such interest is covered by
agreements  relating to Interest Swap Obligations,  shall be deemed to accrue at
the rate per  annum  resulting  after  giving  effect to the  operation  of such
agreements.

     "Consolidated  Fixed  Charges"  means,  with respect to the Company for any
period, the sum, without duplication, of:

     (1) Consolidated Interest Expense (including any premium or penalty paid in
connection  with  redeeming  or  retiring  Indebtedness  of the  Company and its
Restricted  Subsidiaries  prior to the stated maturity  thereof  pursuant to the
agreements governing such Indebtedness); plus

     (2) the product of (x) the amount of all dividend payments on any series of
Preferred  Stock of the Company (other than dividends paid in Qualified  Capital
Stock) paid, accrued or scheduled to be paid or accrued during such period times
(y) a fraction,  the numerator of which is one and the  denominator  of which is
one minus  the then  current  effective  consolidated  federal,  state and local
income tax rate of the Company, expressed as a decimal.

<PAGE>

                                      -9-

     "Consolidated  Interest Expense" means, with respect to the Company for any
period, the sum of, without duplication:

     (1) the aggregate of the interest expense of the Company and its Restricted
Subsidiaries  for such period  determined on a consolidated  basis in accordance
with GAAP, including without limitation,  (a) any amortization of original issue
discount,  (b) the net costs,  losses or gains under Interest Swap  Obligations,
(c) all  capitalized  interest  and (d) the  interest  portion  of any  deferred
payment obligation; and

     (2) the interest  component of Capitalized Lease Obligations paid,  accrued
and/or  scheduled  to be paid  or  accrued  by the  Company  and its  Restricted
Subsidiaries  during such  period,  as  determined  on a  consolidated  basis in
accordance with GAAP.

     "Consolidated  Net  Income"  means,  with  respect to the  Company  for any
period,  the  aggregate  net income (or loss) of the Company and its  Restricted
Subsidiaries for such period on a consolidated  basis,  determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom:

     (1) after-tax gains from Asset Sales or  abandonments or reserves  relating
thereto;

     (2) after-tax items classified as extraordinary or nonrecurring gains;

     (3) the net  income of any Person  acquired  in a  "pooling  of  interests"
transaction  accrued prior to the date it becomes a Restricted  Subsidiary or is
merged or consolidated with the Company or any Restricted Subsidiary;

     (4) the net  income  (but not  loss) of any  Restricted  Subsidiary  to the
extent  that the  declaration  of  dividends  or similar  distributions  by that
Restricted  Subsidiary  of that  income  is  restricted  by  charter,  contract,
operation of law or otherwise;

     (5) the net  income of any  Person in which the  Company  has an  interest,
other than a Restricted  Subsidiary,  except to the extent of cash  dividends or
distributions actually paid to the Company or to a Restricted Subsidiary by such
Person;

     (6) income or loss  attributable  to  discontinued  operations  (including,
without  limitation,  operations  disposed of during such period  whether or not
such operations were classified as discontinued);

     (7) in the case of a successor to the Company by consolidation or merger or
as a  transferee  of the  Company's  assets,  any net  income  (or  loss) of the
successor corporation prior to such consolidation, merger or transfer of assets;
and

     (8) any non-cash charges related to a ceiling test writedown under GAAP.

     "Consolidated Non-Cash Charges" means, with respect to the Company, for any
period, the aggregate depreciation,  depletion,  amortization and other non-cash
expenses of the Company

<PAGE>

                                      -10-

     and its Restricted  Subsidiaries  reducing  Consolidated  Net Income of the
Company for such period,  determined on a consolidated  basis in accordance with
GAAP (excluding any such charges  constituting an extraordinary  item or loss or
any such charge  which  requires an accrual of or a reserve for cash charges for
any future period).

     "consolidation" means, with respect to any Person, the consolidation of the
accounts  of the  Restricted  Subsidiaries  of such  Person  with  those of such
Person, all in accordance with GAAP;  provided,  however,  that  "consolidation"
will not include consolidation of the accounts of any Unrestricted Subsidiary of
such Person with the  accounts of such  Person.  The term  "consolidated"  has a
correlative meaning to the foregoing.

     "Corporate  Trust  Office"  means the  office of the  Trustee  at which any
particular time its corporate trust business shall be principally  administered,
which  office at the date of  execution  of this  Indenture  is  located at Four
Albany Street, New York, New York 10006,  Attention:  Corporate Trust and Agency
Services or at any other time at such other address as the Trustee may designate
from time to time by notice to the Holders and the Company.

     "Covenant Defeasance" has the meaning set forth in Section 8.01.

     "Crude Oil and Natural Gas Business" means:

     (1) the acquisition, exploration, development, operation and disposition of
interests in oil, gas and other Hydrocarbon properties;

     (2) the gathering,  marketing, treating,  processing,  storage, selling and
transporting  of any production from such interests or properties of the Company
or of others; and

     (3) activities incidental to the foregoing.

     "Crude Oil and Natural Gas Hedge  Agreements"  means,  with  respect to any
Person,  any oil and gas agreements and other  agreements or arrangements or any
combination  thereof  entered  into by such  Person  in the  ordinary  course of
business  and that are designed to manage the risks of oil and natural gas price
fluctuations.

     "Crude Oil and  Natural Gas  Properties"  means all  Properties,  including
equity  or other  ownership  interests  therein,  owned by any  Person  to which
"proved oil and gas reserves" as defined in Rule 4-10 of  Regulation  S-X of the
Securities Act have been attributed.

     "Crude Oil and Natural Gas Related  Assets" means any Investment or capital
expenditure (but not including additions to working capital or repayments of any
revolving credit or working capital borrowings) by the Company or any Subsidiary
of the  Company  which  is  related  to the  business  of the  Company  and  its
Subsidiaries as it is conducted on the date of the Asset Sale giving rise to the
Net Cash Proceeds to be reinvested.

<PAGE>

                                      -11-

     "Currency  Agreement"  means any foreign exchange  contract,  currency swap
agreement  or other  similar  agreement or  arrangement  designed to protect the
Company or any  Restricted  Subsidiary of the Company  against  fluctuations  in
currency values.

     "Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.

     "Default"  means an event or condition the  occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.

     "Depository"   means  The  Depository  Trust  Company,   its  nominees  and
successors.

     "Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security  into which it is  convertible  or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily  redeemable,  pursuant to a sinking fund obligation or otherwise, or
is mandatorily  redeemable at the sole option of the holder thereof, in whole or
in part, in either case, on or prior to the final maturity of the Notes.

     "Equity  Offering"  means an offering  of  Qualified  Capital  Stock of the
Company.

     "Event of Default" has the meaning provided in Section 6.01.

     "Exchange  Act" means the Securities  Exchange Act of 1934, as amended,  or
any successor statute or statutes thereto.

     "Exchange  Notes"  has  the  meaning  provided  in  the  preamble  to  this
Indenture.

     "fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between an informed  and  willing  seller and an  informed  and  willing  buyer,
neither  of  whom  is  under  undue  pressure  or  compulsion  to  complete  the
transaction.  Fair market value shall be determined by the Board of Directors of
the  Company (or for  transactions  of $5.0  million or less,  an officer of the
Company or a Restricted  Subsidiary) acting reasonably and in good faith and, if
determined  by the Board of Directors  of the  Company,  shall be evidenced by a
Board  Resolution of the Company  delivered to the Trustee;  provided,  however,
that if the aggregate  non-cash  consideration  to be received by the Company or
any Restricted  Subsidiary  from any Asset Sale shall  reasonably be expected to
exceed  $15.0  million or if the net worth of any  Restricted  Subsidiary  to be
designated as an Unrestricted  Subsidiary shall reasonably be expected to exceed
$15.0  million,  then fair market value shall be  determined  by an  Independent
Advisor.

     "GAAP" means  generally  accepted  accounting  principles  set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the Financial Accounting Standards Board as of any date of determination.

     "Global Note" has the meaning provided in Section 2.01.

<PAGE>

                                      -12-

     "guarantee"  means any obligation,  contingent or otherwise,  of any Person
directly or indirectly  guaranteeing any Indebtedness or other obligation of any
other  Person  and,  without  limiting  the  generality  of the  foregoing,  any
obligation,  direct or indirect,  contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership  arrangements,  or by agreement to keep-well, to purchase assets,
goods,  securities  or  services,  to  take-or-pay,  or  to  maintain  financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such  Indebtedness or other obligation of the
payment  thereof or to protect such obligee  against loss in respect thereof (in
whole  or in part)  (but if in  part,  only to the  extent  thereof);  provided,
however,  that the term  "guarantee"  shall not  include  (A)  endorsements  for
collection  or deposit in the  ordinary  course of business  and (B)  guarantees
(other than guarantees of  Indebtedness)  by the Company in respect of assisting
one or more Subsidiaries in the ordinary course of their respective  businesses,
including  without  limitation  guarantees  of trade  obligations  and operating
leases,  on ordinary  business terms.  The term "guarantee" used as a verb has a
corresponding meaning.

     "Guarantee" means the guarantee of the obligations under this Indenture and
the Notes by each of the  Subsidiary  Guarantors as set forth in Article  Twelve
hereof.

     "Holder" means any Person holding a Note.

     "Hydrocarbons"  means oil,  gas,  casinghead  gas, drip  gasoline,  natural
gasoline, condensate,  distillate, liquid hydrocarbons, gaseous hydrocarbons and
all  constituents,   elements  or  compounds  thereof  and  products   processed
therefrom.

     "incur" has the meaning set forth in Section 4.12.

     "Indebtedness" means with respect to any Person, without duplication:

     (1) all obligations of such Person for borrowed money;

     (2) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;

     (3) all Capitalized Lease Obligations of such Person;

     (4) all  obligations  of such  Person  issued or  assumed  as the  deferred
purchase price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding trade accounts payable);

     (5) all  obligations  for the  reimbursement  of any obligor on a letter of
credit, banker's acceptance or similar credit transaction;

     (6) guarantees and other contingent  obligations in respect of Indebtedness
referred to in clauses (1) through (5) above and clause (8) below;

<PAGE>

                                      -13-

     (7) all  obligations of any other Person of the type referred to in clauses
(1) through (6) above which are secured by any Lien on any  property or asset of
such Person,  the amount of such obligation being deemed to be the lesser of the
fair market value of such  property or asset or the amount of the  obligation so
secured;

     (8) all  Obligations  under  Crude Oil and  Natural  Gas Hedge  Agreements,
Currency Agreements, and Interest Swap Obligations; and

     (9) all Disqualified Capital Stock issued by such Person with the amount of
Indebtedness  represented by such Disqualified  Capital Stock being equal to the
greater of its voluntary or involuntary  liquidation  preference and its maximum
fixed Redemption Price or repurchase price.

     For  purposes  hereof,   the  "maximum  fixed  repurchase   price"  of  any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based  upon,  or  measured  by, the fair  market  value of such  Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the Company.

     The  "amount"  or  "principal  amount"  of  Indebtedness  at  any  time  of
determination as used herein shall,  except as set forth below, be determined in
accordance with GAAP:

     (1) any  Indebtedness  issued at a price  that is less  than the  principal
amount at maturity  thereof shall be the face amount of the liability in respect
thereof;

     (2) any  Capitalized  Lease  Obligation  shall be the amount  determined in
accordance with the definition thereof;

     (3) any Interest Swap  Obligations  included in the definition of Permitted
Indebtedness shall be zero;

     (4)  all  other  unconditional  obligations  shall  be  the  amount  of the
liability thereof determined in accordance with GAAP; and

     (5) all other contingent obligations shall be the maximum liability at such
date of such Person.

     "Indenture"  means this Indenture,  as amended or supplemented from time to
time in accordance with the terms hereof.

     "Independent Advisor" means a reputable accounting, appraisal or nationally
recognized  investment  banking,  engineering or consulting  firm (a) which does
not, and whose  directors,  officers and  employees or Affiliates do not, have a
direct or indirect material  financial interest in the

<PAGE>

                                      -14-

     Company and (b) which,  in the  judgment of the Board of  Directors  of the
Company,  is otherwise  disinterested,  independent and qualified to perform the
task for which it is to be engaged.

     "Initial Notes" has the meaning provided in the preamble to this Indenture.

     "Institutional  Accredited  Investor"  means  an  institution  that  is  an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.

     "interest"  when  used with  respect  to any Note  means the  amount of all
interest  accruing on such Note,  including any  applicable  defaulted  interest
pursuant  to  Section  2.12  and  any  Additional   Interest   pursuant  to  the
Registration Rights Agreement.

     "Interest  Payment  Date" means the stated  maturity of an  installment  of
interest on the Notes.

     "Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement  with any other Person,  whereby,  directly or indirectly,  such
Person is entitled to receive from time to time periodic payments  calculated by
applying  either a floating  or a fixed rate of  interest  on a stated  notional
amount in exchange  for  periodic  payments  made by such Person  calculated  by
applying a fixed or a floating rate of interest on the same notional  amount and
shall include,  without limitation,  interest rate swaps, caps, floors,  collars
and similar agreements.

     "Investment" means, with respect to any Person, any direct or indirect:

     (1)  loan,  advance  or  other  extension  of  credit  (including,  without
limitation, a guarantee) or capital contribution to (by means of any transfer of
cash or other  property  (valued at the fair market value thereof as of the date
of  transfer)  others or any payment for property or services for the account or
use of others);

     (2) purchase or  acquisition  by such Person of any Capital  Stock,  bonds,
notes,  debentures or other  securities or evidences of Indebtedness  issued by,
any Person  (whether by merger,  consolidation,  amalgamation  or otherwise  and
whether  or not  purchased  directly  from  the  issuer  of such  securities  or
evidences of Indebtedness);

     (3) guarantee or assumption of the  Indebtedness of any other Person (other
than the guarantee or assumption of  Indebtedness of such Person or a Restricted
Subsidiary  of such Person which  guarantee or  assumption is made in compliance
with the provisions of Section 4.12); and

     (4) other items that would be classified as  investments on a balance sheet
of such Person prepared in accordance with GAAP.

     Notwithstanding  the foregoing,  "Investment"  shall exclude  extensions of
trade  credit by the Company and its  Restricted  Subsidiaries  on  commercially
reasonable  terms in  accordance  with normal trade  practices of the Company or
such  Restricted  Subsidiary,  as the case may be. The amount of any  Investment
shall not be  adjusted  for  increases  or  decreases  in value,  or  write-ups,

<PAGE>

                                      -15-

     write-downs or write-offs with respect to such  Investment.  If the Company
or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of
any  Restricted  Subsidiary  such that,  after giving effect to any such sale or
disposition,  it ceases to be a Subsidiary of the Company,  the Company shall be
deemed to have made an  Investment  on the date of any such sale or  disposition
equal  to the  fair  market  value  of the  Capital  Stock  of  such  Restricted
Subsidiary not sold or disposed of.

     "Issue  Date" means March 15,  2002,  the date of original  issuance of the
Notes.

     "Legal Defeasance" has the meaning set forth in Section 8.01.

     "Legal Holiday" has the meaning provided in Section 11.07.

     "Lien" means any lien, mortgage,  deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention  agreement,  any lease in the nature thereof and any agreement to give
any security interest).

     "Material  Change"  means an increase or decrease of more than 10% during a
fiscal quarter in the discounted  future net cash flows (excluding  changes that
result  solely from  changes in prices)  from proved oil and gas reserves of the
Company and consolidated  Subsidiaries (before any state or federal income tax);
provided,  however, that the following will be excluded from the Material Change
calculation:

     (1) any  acquisitions  during the quarter of oil and gas reserves that have
been  estimated  by  independent  petroleum  engineers  and on which a report or
reports exist;

     (2) any disposition of properties existing at the beginning of such quarter
that have been disposed of as provided in Section 4.16; and

     (3) any reserves added during the quarter  attributable  to the drilling or
recompletion of wells not included in previous reserve estimates, but which will
be included in future quarters.

     "Maturity Date" means March 15, 2012.

     "Moody's" means Moody's Investors Service, Inc. and its successors.

     "Net Cash Proceeds" means,  with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents  including  payments in respect of deferred
payment  obligations  when  received  in the  form of  cash or Cash  Equivalents
received by the Company or any of its  Restricted  Subsidiaries  from such Asset
Sale net of (a)  reasonable  out-of-pocket  expenses  and fees  relating to such
Asset Sale  (including,  without  limitation,  legal,  accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing  arrangements,  (c) repayment of  Indebtedness
that is  required  to be  repaid in  connection  with  such  Asset  Sale and (d)
appropriate  amounts  (determined by the Chief Financial Officer of the Company)
to be provided by the Company or any Restricted Subsidiary,  as the case may be,
as a reserve,  in accordance with GAAP, against any

<PAGE>

                                      -16-

     post-closing adjustments or liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary,  as the case may be, after
such   Asset   Sale,   including,   without   limitation,   pension   and  other
post-employment  benefit  liabilities,   liabilities  related  to  environmental
matters and liabilities under any  indemnification  obligations  associated with
such Asset Sale.

     "Net Proceeds Offer" has the meaning set forth in Section 4.16.

     "Net Proceeds Offer Amount" has the meaning set forth in Section 4.16.

     "Net  Proceeds  Offer  Payment  Date" has the  meaning set forth in Section
4.16.

     "Net  Proceeds  Offer  Trigger  Date" has the  meaning set forth in Section
4.16.

     "Net Working  Capital"  means (i) all current assets of the Company and its
consolidated Subsidiaries, minus (ii) all current liabilities of the Company and
its  consolidated   Subsidiaries,   except  current   liabilities   included  in
Indebtedness,  in each case as set forth in financial  statements of the Company
prepared in accordance with GAAP.

     "Non-U.S.  Person" means a person who is not a U.S.  person,  as defined in
Regulation S.

     "Notes" means the Initial Notes and the Exchange  Notes treated as a single
class of securities,  as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.

     "Officer" means,  (a) with respect to any corporation,  the Chairman of the
Board of  Directors,  the  Chief  Executive  Officer,  the  President,  any Vice
President,  the Chief Financial Officer, the Treasurer,  the Controller,  or the
Secretary  of such  Person,  or any  other  officer  designated  by the Board of
Directors serving in a similar  capacity,  (b) with respect to any other Person,
the individuals selected by such Person to perform functions similar to those of
the  officers  listed in clause (a),  and (c) with respect to the Trustee or any
agent of the Trustee, a "Trust Officer."

     "Officers'  Certificate"  means a certificate signed by two Officers of the
Company.

     "Opinion  of Counsel"  means a written  opinion  from legal  counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.

     "Paying Agent" has the meaning provided in Section 2.03.

     "Payment Restriction" shall have the meaning set forth in Section 4.13.

     "Pari  Passu  Indebtedness"  means any  Indebtedness  of the Company or any
Subsidiary Guarantor that ranks pari passu in right of payment with the Notes or
such  Guarantees,  as applicable  (other than the Company's 10% Senior Notes due
2007).

<PAGE>

                                      -17-

     "Permitted Indebtedness" means, without duplication, each of the following:

     (1) the Notes,  the Exchange Notes, the Private Exchange Notes, if any, and
the Guarantees;

     (2)  Indebtedness  incurred  pursuant to the Senior  Credit  Facility in an
aggregate  principal amount at any time outstanding not to exceed $325.0 million
under this clause (2);

     (3) Interest  Swap  Obligations  of the Company or a Restricted  Subsidiary
covering  Indebtedness  of the  Company or any of its  Restricted  Subsidiaries;
provided,  however,  that such  Interest  Swap  Obligations  are entered into to
manage  the  exposure  of  the  Company  and  its  Restricted   Subsidiaries  to
fluctuations  in  interest  rates  with  respect  to  Indebtedness  incurred  in
accordance with this Indenture to the extent the net notional  principal  amount
of such Interest Swap  Obligations  does not exceed the principal  amount of the
Indebtedness to which such Interest Swap Obligation relates;

     (4)  Indebtedness  of a  Restricted  Subsidiary  to  the  Company  or  to a
Restricted Subsidiary for so long as such Indebtedness is held by the Company or
a Restricted Subsidiary,  in each case subject to no Lien held by a Person other
than the Company or a Restricted  Subsidiary;  provided,  however, that if as of
any date any Person  other than the Company or a Restricted  Subsidiary  owns or
holds any such  Indebtedness  or holds a Lien in respect  of such  Indebtedness,
such date  shall be deemed  the  incurrence  of  Indebtedness  not  constituting
Permitted Indebtedness under this clause (4) by the issuer of such Indebtedness;

     (5)  Indebtedness of the Company to a Restricted  Subsidiary for so long as
such Indebtedness is held by a Restricted Subsidiary, in each case subject to no
Lien;  provided,  however,  that  (i) any  Indebtedness  of the  Company  to any
Restricted  Subsidiary  that is not a  Subsidiary  Guarantor  is  unsecured  and
subordinated,  pursuant to a written  agreement,  to the  Company's  obligations
under this  Indenture  and the Notes and (ii) if as of any date any Person other
than a Restricted Subsidiary owns or holds any such Indebtedness or holds a Lien
in respect of such  Indebtedness,  such date shall be deemed the  incurrence  of
Indebtedness not constituting  Permitted  Indebtedness  under this clause (5) by
the Company;

     (6)  Indebtedness  arising from the  honoring by a bank or other  financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight  overdrafts) drawn against  insufficient  funds in the ordinary
course of business;  provided,  however,  that such Indebtedness is extinguished
within two Business Days of incurrence;

     (7)  Indebtedness  of the  Company  or any of its  Restricted  Subsidiaries
represented  by  letters  of  credit  for the  account  of the  Company  or such
Restricted  Subsidiary,  as the case may be, in order to  provide  security  for
workers'  compensation  claims or for payment  obligations  in  connection  with
self-insurance,  bid,  performance,  appeal or surety bonds or for completion or
performance  guarantees  or  obligations  or  for  similar  requirements  in the
ordinary course of business;

<PAGE>

                                      -18-

     (8) Refinancing Indebtedness;

     (9) Capitalized  Lease  Obligations and Purchase Money  Indebtedness of the
Company or any of its Restricted  Subsidiaries incurred after the Issue Date not
to exceed $15.0 million at any one time outstanding;

     (10) obligations arising in connection with Crude Oil and Natural Gas Hedge
Agreements of the Company or a Restricted Subsidiary;

     (11) Indebtedness under Currency Agreements; provided, however, that in the
case  of  Currency  Agreements  which  relate  to  Indebtedness,  such  Currency
Agreements do not increase the  Indebtedness  of the Company and its  Restricted
Subsidiaries  outstanding  other  than as a result of  fluctuations  in  foreign
currency  exchange  rates or by reason  of fees,  indemnities  and  compensation
payable thereunder; and

     (12)  additional  Indebtedness  of the  Company  or  any of its  Restricted
Subsidiaries  in an aggregate  principal  amount at any time  outstanding not to
exceed the greater of (i) $20.0  million or (ii) 5.0% of  Adjusted  Consolidated
Net Tangible Assets of the Company.

     In the  event  that  an  item  of  Indebtedness  or  proposed  Indebtedness
(including without limitation Acquired  Indebtedness) meets the criteria of more
than one of the  categories of Permitted  Indebtedness  described in clauses (1)
through (12) above, or is entitled to be incurred under Section 4.12 even if not
Permitted  Indebtedness,  the  Company  will be  permitted  to classify or later
reclassify (in whole or in part in its discretion)  such item of Indebtedness in
any manner that complies with Section 4.12.

     "Permitted Industry Investments" means:

     (1) capital expenditures,  including,  without limitation,  acquisitions of
Company Properties and interests therein;

     (2) entry into operating  agreements,  joint ventures,  working  interests,
royalty interests, mineral leases, unitization agreements,  pooling arrangements
or other similar or customary agreements, transactions, properties, interests or
arrangements,  and  Investments  and  expenditures  in  connection  therewith or
pursuant  thereto,  in each case made or entered into in the ordinary  course of
the oil and natural gas business,  and exchanges of Company Properties for other
Company  Properties of at least  equivalent value as determined in good faith by
the Board of Directors of the Company; and

     (3)  Investments of operating funds on behalf of co-owners of Crude Oil and
Natural  Gas  Properties  of the Company or the  Subsidiaries  pursuant to joint
operating agreements.

     "Permitted Investments" means:

<PAGE>

                                      -19-

     (1)  Investments by the Company or any Restricted  Subsidiary in any Person
that is or will become immediately after such Investment a Restricted Subsidiary
or that will merge or  consolidate  into the Company or a Restricted  Subsidiary
that is not subject to any Payment Restriction;

     (2)  Investments  in the Company by any  Restricted  Subsidiary;  provided,
however,  that  any  Indebtedness  evidencing  any  such  Investment  held  by a
Restricted  Subsidiary  that is not a  Subsidiary  Guarantor  is  unsecured  and
subordinated,  pursuant to a written  agreement,  to the  Company's  obligations
under the Notes and this Indenture;

     (3) Investments in cash and Cash Equivalents;

     (4)  Investments  made by the Company or its Restricted  Subsidiaries  as a
result  of  consideration  received  in  connection  with an Asset  Sale made in
compliance with Section 4.16;

     (5) Permitted Industry Investments;

     (6)  Investments to the extent that Qualified  Capital Stock of the Company
is the consideration paid or provided by the Company; and

     (7) additional Investments made after the Issue Date in an aggregate amount
not to exceed $10.0 million at any one time outstanding.

     "Permitted Liens" means each of the following types of Liens:

     (1) Liens  existing  as of the Issue  Date to the  extent and in the manner
such Liens are in effect on the Issue Date (and any extensions,  replacements or
renewals thereof covering  property or assets secured by such Liens on the Issue
Date);

     (2)  Liens  securing  Indebtedness  outstanding  under  the  Senior  Credit
Facility;

     (3) Liens securing the Notes and the Guarantees;

     (4)  Liens of the  Company  or a  Restricted  Subsidiary  on  assets of any
Restricted Subsidiary;

     (5) Liens securing Refinancing  Indebtedness which is incurred to Refinance
any Indebtedness which has been secured by a Lien permitted under this Indenture
and which has been incurred in accordance with the provisions of this Indenture;
provided,  however, that such Liens (x) are no less favorable to the Holders and
are not more  favorable to the  lienholders  with respect to such Liens than the
Liens in respect of the  Indebtedness  being Refinanced and (y) do not extend to
or  cover  any  property  or  assets  of the  Company  or any of its  Restricted
Subsidiaries not securing the Indebtedness so Refinanced;

<PAGE>

                                      -20-

     (6) Liens for taxes,  assessments or governmental  charges or claims either
not delinquent or contested in good faith by appropriate  proceedings  and as to
which the Company or a Restricted Subsidiary, as the case may be, shall have set
aside on its books such reserves as may be required pursuant to GAAP;

     (7) statutory and contractual  Liens of landlords to secure rent arising in
the  ordinary  course of business  to the extent  such Liens  relate only to the
tangible  property of the lessee which is located on such  property and Liens of
carriers, warehousemen,  mechanics, suppliers, materialmen,  repairmen and other
Liens  imposed by law incurred in the  ordinary  course of business for sums not
yet  delinquent  or being  contested  in good  faith,  if such  reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
in respect thereof;

     (8) Liens incurred or deposits made in the ordinary  course of business (i)
in connection with workers' compensation, unemployment insurance and other types
of social security,  including any Lien securing letters of credit issued in the
ordinary  course  of  business  consistent  with  past  practice  in  connection
therewith, or (ii) to secure the performance of tenders,  statutory obligations,
surety and appeal bonds, bids,  leases,  government  contracts,  performance and
return-of-money bonds and other similar obligations (including letters of credit
in  connection  therewith,  but  exclusive  of  obligations  for the  payment of
borrowed money);

     (9) judgment and attachment Liens not giving rise to an Event of Default;

     (10) easements, rights-of-way, zoning restrictions,  restrictive covenants,
minor  imperfections  in title and other  similar  charges  or  encumbrances  in
respect of real  property  not  interfering  in any  material  respect  with the
ordinary  conduct  of the  business  of  the  Company  or any of its  Restricted
Subsidiaries;

     (11)  any  interest  or  title  of a lessor  under  any  Capitalized  Lease
Obligation;  provided  that such Liens do not extend to any  property  or assets
which is not leased property subject to such Capitalized Lease Obligation;

     (12) Liens  securing  Purchase  Money  Indebtedness  of the  Company or any
Restricted   Subsidiary;   provided,   however,  that  (i)  the  Purchase  Money
Indebtedness  shall not be secured by any  property  or assets of the Company or
any  Restricted  Subsidiary  other than the  property  and assets so acquired or
constructed (except for proceeds, improvements, rents and similar items relating
to the property or assets so acquired or constructed) and (ii) the Lien securing
such  Indebtedness  shall  be  created  within  90 days of such  acquisition  or
construction;

     (13) Liens securing  reimbursement  obligations  with respect to commercial
letters of credit which encumber  documents and other property  relating to such
letters of credit and products and proceeds thereof;

<PAGE>

                                      -21-

     (14) Liens  encumbering  deposits made to secure  obligations  arising from
statutory,  regulatory,  contractual, or warranty requirements of the Company or
any of its Restricted Subsidiaries, including rights of offset and set-off;

     (15)  Liens  securing   Interest  Swap  Obligations   which  Interest  Swap
Obligations  relate to  Indebtedness  that is  otherwise  permitted  under  this
Indenture and Liens securing Crude Oil and Natural Gas Hedge Agreements;

     (16) Liens  securing  Acquired  Indebtedness  incurred in  accordance  with
Section  4.12;  provided,  however,  that (i) such Liens  secured such  Acquired
Indebtedness  at the  time of and  prior  to the  incurrence  of  such  Acquired
Indebtedness  by the Company or a Restricted  Subsidiary and were not granted in
connection  with,  or in  anticipation  of,  the  incurrence  of  such  Acquired
Indebtedness  by the Company or a Restricted  Subsidiary  and (ii) such Liens do
not extend to or cover any  property  or assets of the  Company or of any of its
Restricted  Subsidiaries  other than the  property  or assets  that  secured the
Acquired  Indebtedness  prior  to the time  such  Indebtedness  became  Acquired
Indebtedness  of the Company or a Restricted  Subsidiary  (except for  proceeds,
improvements,  rents and similar  items  relating  to the  property or assets so
secured) and are no more  favorable to the  lienholders  than those securing the
Acquired  Indebtedness prior to the incurrence of such Acquired  Indebtedness by
the Company or a Restricted Subsidiary;

     (17) Liens on, or related to,  properties and assets of the Company and its
Subsidiaries  to secure  all or a part of the  costs  incurred  in the  ordinary
course  of  business  of   exploration,   drilling,   development,   production,
processing,  gas gathering,  transportation,  marketing or storage, or operation
thereof;

     (18) Liens on pipeline or pipeline  facilities,  Hydrocarbons or properties
and assets of the Company and its  Subsidiaries  which arise out of operation of
law;

     (19)  royalties,  overriding  royalties,  revenue  interests,  net  revenue
interests,  net profit interests,  reversionary interests,  production payments,
production  sales  contracts,   preferential   rights  of  purchase,   operating
agreements,   working  interests  and  other  similar   interests,   properties,
arrangements and agreements,  all as ordinarily exist with respect to Properties
and assets of the Company and its  Subsidiaries or otherwise as are customary in
the oil and gas business;

     (20) with  respect  to any  Properties  and assets of the  Company  and its
Subsidiaries,  Liens  arising  under,  or in  connection  with,  or related  to,
farm-out,  farm-in,  joint operation,  area of mutual interest agreements and/or
other  similar or  customary  arrangements,  agreements  or  interests  that the
Company  or any  Subsidiary  determines  in good faith to be  necessary  for the
economic development of such Property;

     (21) any (a)  interest or title of a lessor or  sublessor  under any lease,
(b)  restriction  or  encumbrance  that the  interest or title of such lessor or
sublessor may be subject to  (including,  without  limitation,  ground leases or
other prior leases of the demised  premises,  mortgages,

<PAGE>

                                      -22-

     mechanics'  liens, tax liens, and easements),  or (c)  subordination of the
interest  of the lessee or  sublessee  under such lease to any  restrictions  or
encumbrance referred to in the preceding clause (b);

     (22) Liens in favor of  collecting or payor banks having a right of setoff,
revocation,  refund or chargeback  with respect to money or  instruments  of the
Company or any  Restricted  Subsidiary  on deposit with or in possession of such
bank; and

     (23) Liens  incurred in the ordinary  course of business and not  exceeding
$15.0 million in the aggregate at any one time.

     "Person"  means an  individual,  partnership,  corporation,  unincorporated
organization,  limited liability company,  trust, estate, or joint venture, or a
governmental agency or political subdivision thereof.

     "Physical Notes" has the meaning provided in Section 2.01.

     "Preferred Stock" of any Person means any Capital Stock of such Person that
has  preferential  rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.

     "principal" of any  Indebtedness  (including the Notes) means the principal
amount of such Indebtedness plus the premium, if any, on such Indebtedness.

     "Private  Exchange  Notes"  means  unsecured  senior  notes of the Company,
guaranteed by the  Subsidiary  Guarantors,  issued in exchange for the Notes and
identical  in all  material  respects  to the  Exchange  Notes,  except  for the
placement of a restrictive legend on such Private Exchange Notes.

     "Private  Placement  Legend"  means the legend  initially  set forth on the
Notes in the form set forth in Section 2.15.

     "pro forma" means,  with respect to any calculation  made or required to be
made pursuant to the terms of this  Indenture,  a calculation in accordance with
Article 11 of  Regulation  S-X under the  Securities  Act, as  determined by the
Board of Directors of the Company in consultation  with its  independent  public
accountants.

     "Property" means, with respect to any Person,  any interests of such Person
in any kind of property or asset,  whether real,  personal or mixed, or tangible
or  intangible,   including,  without  limitation,  Capital  Stock,  partnership
interests and other equity or ownership interests in any other Person.

     "Purchase Money  Indebtedness" means Indebtedness the net proceeds of which
are used to finance the cost (including the cost of construction) of property or
assets  acquired in the normal course of business by the Person  incurring  such
Indebtedness.

<PAGE>

                                      -23-

     "Qualified  Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.

     "Qualified  Institutional  Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.

     "Record Date" means the Record Dates specified in the Notes.

     "Redemption Date," when used with respect to any Note to be redeemed, means
the date fixed for such redemption pursuant to this Indenture and the Notes.

     "Redemption  Price,"  when used with  respect  to any Note to be  redeemed,
means the price fixed for such redemption,  including  principal and premium, if
any, pursuant to this Indenture and the Notes.

    8 "Reference Date" has the meaning set forth in Section 4.10.

     "Refinance"  means,  in  respect  of  any  security  or  Indebtedness,   to
refinance,  extend, renew, refund, repay, prepay,  redeem, defease or retire, or
to issue a security  or  Indebtedness  in  exchange  or  replacement  for,  such
security or Indebtedness  in whole or in part.  "Refinanced"  and  "Refinancing"
shall have correlative meanings.

     "Refinancing  Indebtedness"  means any  Refinancing  by the  Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance with
Section 4.12 (other than  pursuant to clause (2),  (3), (4), (5), (6), (7), (9),
(10),  (11) or (12) of the definition of Permitted  Indebtedness),  in each case
that does not:

     (1) result in an increase in the aggregate principal amount of Indebtedness
of such Person as of the date of such proposed  Refinancing  (plus the amount of
any premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable  expenses incurred by the Company
and its Restricted Subsidiaries in connection with such Refinancing); or

     (2) create  Indebtedness  with (x) a Weighted Average Life to Maturity that
is less than the  Weighted  Average Life to Maturity of the  Indebtedness  being
Refinanced  or (y) a final  maturity  earlier  than the  final  maturity  of the
Indebtedness being Refinanced;  provided, however, that (a) if such Indebtedness
being Refinanced is Indebtedness of the Company or a Subsidiary Guarantor,  then
such Refinancing Indebtedness shall be Indebtedness solely of the Company and/or
such  Subsidiary  Guarantor  and (b) if such  Indebtedness  being  Refinanced is
subordinate  or  junior  to the  Notes or a  Guarantee,  then  such  Refinancing
Indebtedness  shall be subordinate to the Notes or such  Guarantee,  as the case
may be, at least to the same extent and in the same  manner as the  Indebtedness
being Refinanced.

     "Registrar" has the meaning provided in Section 2.03.

<PAGE>

                                      -24-

     "Registration  Rights  Agreement" means the  Registration  Rights Agreement
dated as of the Issue Date among the Company, the Subsidiary  Guarantors and the
Initial  Purchasers (as defined therein),  or, with respect to Additional Notes,
any registration  rights agreement entered into in connection with such issuance
thereof.

     "Regulation S" means Regulation S under the Securities Act.

     "Related  Person"  of  any  Person  means  any  other  Person  directly  or
indirectly  owning 10% or more of the  outstanding  voting  Common Stock of such
Person (or, in the case of a Person  that is not a  corporation,  10% or more of
the equity interest in such Person).

     "Replacement Assets" shall have the meaning set forth in Section 4.16.

     "Restricted Payment" shall have the meaning set forth in Section 4.10.

     "Restricted  Security"  has  the  meaning  assigned  to  such  term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively  rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.

     "Restricted  Subsidiary"  means any  Subsidiary of the Company that has not
been  designated  by the Board of  Directors  of the Company as an  Unrestricted
Subsidiary pursuant to and in compliance with Section 4.14. Any such designation
may be revoked by a Board  Resolution  of the Company  delivered to the Trustee,
subject to the provisions of Section 4.14.

     "Rule 144A" means Rule 144A under the Securities Act.

     "S&P" means  Standard & Poor's  Rating  Services,  a division of The McGraw
Hill Companies, Inc., and its successors.

     "Sale and Leaseback  Transaction" means any direct or indirect  arrangement
with any  Person  or to which  any such  Person  is a party,  providing  for the
leasing to the Company or a Restricted Subsidiary of any Property, whether owned
by the Company or any Restricted Subsidiary at the Issue Date or later acquired,
which has been or is to be sold or transferred by the Company or such Restricted
Subsidiary  to such  Person or to any other  Person from whom funds have been or
are to be advanced by such Person on the security of such Property.

     "Securities  Act" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations of the Commission promulgated thereunder.

     "Senior  Credit  Facility"  means the Fourth  Amended and  Restated  Credit
Agreement  dated as of March 15, 2002 by and among the  Company,  Bankers  Trust
Company, as Administrative  Agent, and each of the lenders named therein, or any
successor or  replacement  agreement and whether by the same or any other agent,
lender  or  group  of  lenders,  together  with the  related  documents  thereto
(including,   without   limitation,   any  guarantee   agreements  and  security
documents),  in each  case as such  agreements  may be  amended  (including  any
amendment and restatement thereof), supplemented or otherwise modified from time
to time,  including  any  agreements  extending  the maturity  of,

<PAGE>

                                      -25-

     refinancing,  replacing,  increasing or otherwise  restructuring all or any
portion of the Indebtedness under such agreements.

     "Significant  Subsidiary" means a Restricted Subsidiary of the Company that
is also a "significant  subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the Securities Act.

     "Subsidiary,"  with respect to any Person,  means any  corporation of which
the  outstanding  Capital Stock having at least a majority of the votes entitled
to be cast in the election of directors  under ordinary  circumstances  shall at
the time be owned, directly or indirectly, by such Person or any other Person of
which at least a majority of the voting interest under ordinary circumstances is
at the time, directly or indirectly, owned by such Person.

     "Subsidiary Guarantor" means each of the Company's Restricted  Subsidiaries
as of the Issue Date (other than Inesco  Corporation,  SPL Gas  Marketing  Inc.,
Pintail Oil & Gas, Inc. and Midland Hunter Petroleum Limited Liability  Company)
and each of the Company's Restricted  Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary agrees to be bound by
the terms of this Indenture as a Subsidiary Guarantor;  provided,  however, that
any Person constituting a Subsidiary Guarantor as described above shall cease to
constitute a Subsidiary  Guarantor  when its Guarantee is released in accordance
with the terms of this Indenture.

     "Surviving Entity" shall have the meaning set forth in Section 5.01.

     "TCW  Preferred  Stock" means the one million  shares of the Company's 1996
Series A Convertible  Preferred  Stock,  $0.001 par value per share and a $10.00
stated value per share with a quarterly dividend rate of $0.21875 per share.

     "TIA"   means  the  Trust   Indenture   Act  of  1939  (15  U.S.C.   ss.ss.
77aaa-77bbbb),  as in effect on the date of this Indenture; provided that in the
event the Trust  Indenture Act of 1939 is amended after such date,  "TIA" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.

     "Trust  Officer"  means any  officer  within  the  Corporate  Trust  Office
including  any Vice  President,  Managing  Director,  Director,  Assistant  Vice
President, Associate, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is  referred  because  of such  officer's  knowledge  and  familiarity  with the
particular  subject,  or in the case of a successor trustee, an officer assigned
to the department,  division or group  performing the corporation  trust work of
such successor and assigned to administer this Indenture.

     "Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance  with the  provisions of this Indenture and thereafter
means such successor.

     "U.S.  Government  Obligations" mean direct obligations of, and obligations
guaranteed  by, the United  States of America  for the payment of which the full
faith and credit of the United States of America is pledged.

<PAGE>

                                      -26-

     "U.S.  Legal  Tender"  means such coin or currency of the United  States of
America  as at the time of  payment  shall be legal  tender  for the  payment of
public and private debts.

     "Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance  with Section 4.14;  provided,  however,  the
Unrestricted  Subsidiaries shall initially include Hunter Butcher  International
Limited Liability Company,  Canvasback Energy, Inc. and Redhead Energy, Inc. Any
such designation may be revoked by a Board  Resolution of the Company  delivered
to the Trustee, subject to the provisions of such Section 4.14.

     "Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years  obtained by dividing (1) the then  outstanding
aggregate principal amount of such Indebtedness into (2) the sum of the total of
the  products  obtained  by  multiplying  (a) the amount of each then  remaining
installment,  sinking  fund,  serial  maturity  or  other  required  payment  of
principal,  including payment at final maturity,  in respect thereof, by (b) the
number of years  (calculated  to the  nearest  one-twelfth)  which  will  elapse
between such date and the making of such payment.

     SECTION 1.02. Incorporation by Reference of TIA.

     Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture.  The following
TIA terms used in this Indenture have the following meanings:

     "indenture securities" means the Notes;

     "indenture security holder" means a Holder;

     "indenture to be qualified" means this Indenture;

     "indenture trustee" or "institutional trustee" means the Trustee;

     "obligor"  on the  indenture  securities  means  the  Company  or any other
obligor on the Notes.

     All other TIA terms  used in this  Indenture  that are  defined by the TIA,
defined by TIA reference to another  statute or defined by  Commission  rule and
not otherwise defined herein have the meanings assigned to them therein.

     SECTION 1.03. Rules of Construction.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

     (2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;

<PAGE>

                                      -27-

     (3) "or" is not exclusive;

     (4) words in the  singular  include  the  plural,  and words in the  plural
include the singular;

     (5)  "herein,"  "hereof"  and other words of similar  import  refer to this
Indenture  as a whole  and  not to any  particular  Article,  Section  or  other
subdivision; and

     (6) any reference to a statute,  law or regulation means that statute,  law
or  regulation  as  amended  and in effect  from time to time and  includes  any
successor statute, law or regulation;  provided,  however, that any reference to
the  Bankruptcy  Law shall mean the Bankruptcy Law as applicable to the relevant
case.

                                   ARTICLE TWO

                                    THE NOTES

     SECTION 2.01. Form and Dating.

     The Initial Notes and the Trustee's certificate of authentication  relating
thereto  shall be  substantially  in the form of Exhibit A hereto.  The Exchange
Notes and the Trustee's certificate of authentication  relating thereto shall be
substantially  in the form of  Exhibit B hereto.  The Notes may have  notations,
legends or endorsements  required by law, stock exchange rule or depository rule
or usage.  The Company and the Trustee  shall  approve the form of the Notes and
any notation,  legend or endorsement on them.  Each Note shall be dated the date
of its issuance and shall show the date of its  authentication.  Each Note shall
have an executed Guarantee endorsed thereon substantially in the form of Exhibit
E hereto.

     The terms and provisions contained in the Notes, annexed hereto as Exhibits
A and B,  shall  constitute,  and  are  hereby  expressly  made,  a part of this
Indenture and, to the extent applicable,  the Company and the Trustee,  by their
execution  and  delivery of this  Indenture,  expressly  agree to such terms and
provisions and to be bound thereby.

     Notes offered and sold in reliance on Rule 144A,  Notes offered and sold to
institutional  "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7)  under  the  Securities  Act) and  Notes  offered  and sold in  reliance  on
Regulation  S shall be  issued  initially  in the form of one or more  permanent
global Notes in registered form,  substantially in the form set forth in Exhibit
A (the  "Global  Note"),  deposited  with  the  Trustee,  as  custodian  for the
Depository,  duly  executed  by the Company  (and  having an executed  Guarantee
endorsed thereon) and  authenticated by the Trustee as hereinafter  provided and
shall bear the legend set forth in Section 2.15. The aggregate  principal amount
of the  Global  Note  may  from  time to  time  be  increased  or  decreased  by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.

<PAGE>

                                      -28-

     Notes issued in exchange for interests in a Global Note pursuant to Section
2.16 may be issued in the form of  permanent  certificated  Notes in  registered
form in substantially the form set forth in Exhibit A (the "Physical Notes").

     SECTION 2.02. Execution and Authentication; Aggregate Principal Amount.

     Two  Officers,  or an Officer and an  Assistant  Secretary  of the Company,
shall sign, or one Officer shall sign and one Officer or an Assistant  Secretary
(each of whom shall,  in each case,  have been duly  authorized by all requisite
corporate  actions)  shall  attest  to,  the Notes for the  Company by manual or
facsimile signature.

     If an Officer or  Assistant  Secretary  whose  signature  is on a Note or a
Guarantee  was an Officer or Assistant  Secretary at the time of such  execution
but  no  longer   holds  that  office  or  position  at  the  time  the  Trustee
authenticates the Note, the Note shall nevertheless be valid.

     A Note shall not be valid  until an  authorized  signatory  of the  Trustee
manually  signs the  certificate  of  authentication  on the Note. The signature
shall be  conclusive  evidence that the Note has been  authenticated  under this
Indenture.

     The Trustee shall  authenticate (i) Initial Notes for original issue on the
Issue Date in the aggregate  principal amount not to exceed  $300,000,000,  (ii)
subject to Section 4.12,  Additional Notes and (iii) Exchange Notes from time to
time for issue only in exchange for a like principal amount of Initial Notes, in
each  case  upon a  written  order of the  Company  in the form of an  Officers'
Certificate of the Company.  Each such written order shall specify the amount of
Notes  to  be  authenticated  and  the  date  on  which  the  Notes  are  to  be
authenticated,  whether the Notes are to be Initial Notes,  Additional  Notes or
Exchange  Notes and  whether  the Notes  are to be issued as  Physical  Notes or
Global Notes or such other  information as the Trustee may  reasonably  request.
Any  Additional  Notes shall be part of the same issue as the Notes being issued
on the Issue Date and will vote on all matters as one class with the Notes being
issued on the Issue Date, including,  without limitation,  waivers,  amendments,
redemptions,  Change of Control Offers and Net Proceeds Offers. For the purposes
of this  Indenture,  except for Section  4.12,  references  to the Notes include
Additional Notes, if any. In addition,  with respect to authentication  pursuant
to clauses  (ii) and (iii) of the first  sentence of this  paragraph,  the first
such  written  order  from the  Company  shall be  accompanied  by an Opinion of
Counsel of the Company in a form reasonably  satisfactory to the Trustee stating
that the issuance of the  Additional  Notes or Exchange Notes does not give rise
to an  Event  of  Default,  complies  with  this  Indenture  and has  been  duly
authorized by the Company.

     The  Trustee  may  appoint an  authenticating  agent  (the  "Authenticating
Agent")  reasonably  acceptable  to the Company to  authenticate  Notes.  Unless
otherwise provided in the appointment,  an Authenticating Agent may authenticate
Notes  whenever  the Trustee  may do so. Each  reference  in this  Indenture  to
authentication  by the Trustee includes  authentication  by such  Authenticating
Agent. An Authenticating  Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.

<PAGE>

                                      -29-

     The Notes shall be issuable in fully registered form only, without coupons,
in denominations of $1,000 and any integral multiple thereof.

     SECTION 2.03. Registrar and Paying Agent.

     The Company  shall  maintain an office or agency (which shall be located in
the Borough of Manhattan  in the City of New York,  State of New York) where (a)
Notes may be  presented  or  surrendered  for  registration  of  transfer or for
exchange  ("Registrar"),  (b) Notes may be presented or surrendered  for payment
("Paying  Agent")  and (c) notices and demands to or upon the Company in respect
of the Notes and this  Indenture  may be  served.  The  Registrar  shall  keep a
register of the Notes and of their  transfer and  exchange.  The  Company,  upon
prior written notice to the Trustee,  may have one or more co-Registrars and one
or more additional paying agents reasonably  acceptable to the Trustee. The term
"Paying Agent" includes any additional  Paying Agent. The Company may act as its
own Paying  Agent,  except  that,  for the  purposes  of  payments  on the Notes
pursuant to Sections 4.15 and 4.16, neither the Company nor any Affiliate of the
Company may act as Paying Agent.

     The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture,  which agreement shall incorporate the provisions
of the TIA and implement the  provisions of this  Indenture  that relate to such
Agent. The Company shall notify the Trustee, in advance, of the name and address
of any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such.

     The Company initially  appoints the Trustee as Registrar,  Paying Agent and
agent for  service of demands and notices in  connection  with the Notes,  until
such time as the Trustee has resigned or a successor has been appointed.  Any of
the  Registrar,  the Paying  Agent or any other  agent may resign  upon 30 days'
notice to the Company.

     SECTION 2.04. Paying Agent To Hold Assets in Trust.

     The Company shall require each Paying Agent other than the Trustee to agree
in writing  that such  Paying  Agent  shall hold in trust for the benefit of the
Holders or the Trustee  all assets  held by the Paying  Agent for the payment of
principal of,  premium,  if any, or interest on, the Notes  (whether such assets
have been  distributed  to it by the Company or any other obligor on the Notes),
and the Company and the Paying  Agent shall notify the Trustee of any Default by
the Company (or any other obligor on the Notes) in making any such payment.  The
Company at any time may require a Paying Agent to distribute  all assets held by
it to the Trustee and  account for any assets  disbursed  and the Trustee may at
any time during the continuance of any payment Default,  upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets  distributed.  If the Company  acts as
Paying  Agent,  it shall  segregate  and hold in a  separate  trust fund for the
benefit of the Holders all assets held by it as Paying Agent.  Upon distribution
to the  Trustee of all assets that shall have been  delivered  by the Company to
the Paying  Agent,  the Paying Agent (if other than the  Company)  shall have no
further liability for such assets.

<PAGE>

                                      -30-

     SECTION 2.05. Holder Lists.

     The  Trustee  shall  preserve  in  as  current  a  form  as  is  reasonably
practicable  the most recent list  available to it of the names and addresses of
the Holders and shall  otherwise  comply with TIA ss. 312(a).  If the Trustee is
not the  Registrar,  the Company shall furnish or cause the Registrar to furnish
to the  Trustee  before  each Record Date and at such other times as the Trustee
may  request in  writing a list as of such date and in such form as the  Trustee
may reasonably require of the names and addresses of the Holders, which list may
be conclusively relied upon by the Trustee.

     SECTION 2.06. Transfer and Exchange.

     When Notes are presented to the Registrar or a co-Registrar  with a request
to register  the  transfer of such Notes or to exchange  such Notes for an equal
principal  amount of Notes or other authorized  denominations,  the Registrar or
co-Registrar  shall  register  the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for  registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company, the Trustee and the Registrar or co-Registrar,  duly executed by
the  Holder  thereof or his  attorney  duly  authorized  in  writing.  To permit
registration  of transfers  and  exchanges,  the Company  shall  execute and the
Trustee shall  authenticate  Notes and the Subsidiary  Guarantors  shall execute
Guarantees  thereon at the  Registrar's or  co-Registrar's  request.  No service
charge  shall be made for any  registration  of  transfer or  exchange,  but the
Company may require  payment of a sum  sufficient to cover any transfer tax, fee
or similar  governmental charge payable in connection  therewith (other than any
such transfer  taxes or similar  governmental  charge  payable upon exchanges or
transfers  pursuant to Sections 2.10,  3.03,  4.15, 4.16 or 9.05, in which event
the Company shall be responsible for the payment of such taxes).

     The  Registrar  or  co-Registrar  shall not be  required  to  register  the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days  before the mailing of a notice of  redemption  of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three,  except the unredeemed
portion of any Note being redeemed in part.

     Any Holder of a beneficial  interest in a Global Note shall,  by acceptance
of such Global Note, agree that transfers of beneficial interests in such Global
Notes may be effected only through a book entry system  maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial  interest
in the Note shall be required to be reflected in a book entry system.

     SECTION 2.07. Replacement Notes.

     If a  mutilated  Note is  surrendered  to the Trustee or if the Holder of a
Note claims that the Note has been lost,  destroyed  or  wrongfully  taken,  the
Company shall issue and the Trustee shall  authenticate  a replacement  Note and
the  Subsidiary  Guarantors  shall execute a Guarantee  thereon if the Trustee's
requirements  are met. If required  by the Trustee or the  Company,  such Holder
must  provide  an  indemnity  bond  or  other  indemnity  of  reasonable  tenor,
sufficient in the reasonable judgment of the Company, the Subsidiary  Guarantors
and the Trustee, to protect the Company, the

<PAGE>

                                      -31-

     Subsidiary Guarantors,  the Trustee or any Agent from any loss which any of
them may suffer if a Note is replaced.  Every  replacement Note shall constitute
an additional obligation of the Company and the Subsidiary Guarantors.

     SECTION 2.08. Outstanding Notes.

     Notes   outstanding   at  any  time  are  all  the  Notes  that  have  been
authenticated  by the Trustee except those canceled by it, those delivered to it
for cancellation,  those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof and those described in this
Section as not  outstanding.  Subject to the  provisions of Section 2.09, a Note
does not cease to be  outstanding  because the Company or any of its  Affiliates
holds the Note.

     If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered  for  replacement),  it ceases to be outstanding  unless the Trustee
receives proof  satisfactory to it that the replaced Note is held by a bona fide
purchaser for value. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.

     If on a Redemption  Date or the Maturity  Date the Paying Agent (other than
the Company,  a Subsidiary  or an  Affiliate  of any thereof)  holds U.S.  Legal
Tender or U.S.  Government  Obligations  sufficient to pay all of the principal,
premium,  if any, and interest due on the Notes  payable on that date and is not
prohibited from paying such money to the Holders  thereof  pursuant to the terms
of this Indenture, then on and after that date such Notes shall be deemed not to
be outstanding and interest on them shall cease to accrue.

     SECTION 2.09. Treasury Notes.

     In  determining  whether the Holders of the  required  principal  amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or an Affiliate of the Company  shall be  considered  as though they
are not  outstanding,  except that for the purposes of  determining  whether the
Trustee shall be protected in relying on any such direction,  waiver or consent,
only Notes  which a Trust  Officer of the  Trustee  actually  knows are so owned
shall be so considered.  The Company shall notify the Trustee, in writing,  when
either of them or, to their knowledge,  any of their  Affiliates  repurchases or
otherwise  acquires  Notes, of the aggregate  principal  amount of such Notes so
repurchased or otherwise  acquired and such other information as the Trustee may
reasonably request and the Trustee shall be entitled to rely thereon.

     SECTION 2.10. Temporary Notes.

     Until definitive Notes are ready for delivery,  the Company may prepare and
the Trustee shall  authenticate  temporary Notes upon receipt of a written order
of  the  Company  in  the  form  of  an  Officers'  Certificate.  The  Officers'
Certificate  shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be  authenticated.  Temporary Notes
shall be  substantially  in the form of definitive Notes but may have variations
that the Company consider appropriate for temporary Notes and so indicate in the
Officers'  Certificate.  Without  unreasonable delay, the Company shall prepare,
the Trustee  shall  authenticate  and the  Subsidiary

<PAGE>

                                      -32-

     Guarantors shall execute  Guarantees on, upon receipt of a written order of
the Company pursuant to Section 2.02, definitive Notes in exchange for temporary
Notes.

     SECTION 2.11. Cancellation.

     The Company at any time may deliver Notes to the Trustee for  cancellation.
The  Registrar  and the Paying  Agent  shall  forward to the  Trustee  any Notes
surrendered to them for transfer,  exchange or payment.  The Trustee,  or at the
direction of the Trustee,  the Registrar or the Paying  Agent,  and no one else,
shall cancel and, at the written direction of the Company, shall dispose, in its
customary manner, of all Notes  surrendered for transfer,  exchange,  payment or
cancellation. The Trustee shall maintain a record of all canceled Notes. Subject
to Section 2.07,  the Company may not issue new Notes to replace Notes that they
have paid or delivered  to the Trustee for  cancellation.  If the Company  shall
acquire any of the Notes,  such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness  represented by such Notes unless and until the
same are  surrendered to the Trustee for  cancellation  pursuant to this Section
2.11.

     SECTION 2.12. Defaulted Interest.

     The Company  will pay  interest on overdue  principal  from time to time on
demand at the rate of interest then borne by the Notes.  The Company  shall,  to
the extent lawful,  pay interest on overdue  installments  of interest  (without
regard to any applicable  grace periods) from time to time on demand at the rate
of interest then borne by the Notes. Interest will be computed on the basis of a
360-day year  comprised of twelve 30-day  months,  and, in the case of a partial
month, the actual number of days elapsed.

     If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest,  plus (to the extent lawful) any interest payable on the
defaulted  interest,  to the  Persons who are  Holders on a  subsequent  special
record date, which special record date shall be the fifteenth day next preceding
the date fixed by the Company for the payment of defaulted  interest or the next
succeeding  Business Day if such date is not a Business  Day. The Company  shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the  proposed  payment  (a  "Default  Interest
Payment Date"),  and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate  amount proposed to be paid in respect
of such  defaulted  interest  or shall  make  arrangements  satisfactory  to the
Trustee for such deposit on or prior to the date of the proposed  payment,  such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section; provided,  however, that
in no event shall the Company  deposit monies  proposed to be paid in respect of
defaulted  interest  later than 11:00  a.m.  New York City time of the  proposed
Default  Interest  Payment Date. At least 15 days before the subsequent  special
record date,  the Company shall mail (or cause to be mailed) to each Holder,  as
of a recent date selected by the Company,  with a copy to the Trustee,  a notice
that states the subsequent  special record date, the payment date and the amount
of defaulted interest,  and interest payable on such defaulted interest, if any,
to be paid.  Notwithstanding the foregoing,  any interest which is paid prior to
the  expiration of the 30-day period set forth in Section  6.01(a) shall be paid
to Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid.  Notwithstanding the foregoing, the Company may make
payment of

<PAGE>

                                      -33-

     any defaulted interest in any other lawful manner not inconsistent with the
requirements  of any securities  exchange on which the Notes may be listed,  and
upon such notice as may be required by such exchange.

     SECTION 2.13. CUSIP Number.

     The Company in issuing the Notes may use a "CUSIP" number,  and, if so, the
Trustee  shall use the CUSIP  number in notices of  redemption  or exchange as a
convenience to Holders;  provided,  however,  that no  representation  is hereby
deemed to be made by the Trustee as to the  correctness or accuracy of the CUSIP
number  printed in the notice or on the Notes,  and that  reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.

     SECTION 2.14. Deposit of Monies.

     Prior to 11:00  a.m.  New York City  time on each  Interest  Payment  Date,
Maturity Date,  Redemption Date, Change of Control Payment Date and Net Proceeds
Offer Payment Date,  the Company shall have  deposited  with the Paying Agent in
immediately  available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment  Date and Net  Proceeds  Offer  Payment  Date,  as the case may be, in a
timely  manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date,  Maturity Date,  Redemption Date,  Change of Control
Payment Date and Net Proceeds Offer Payment Date, as the case may be.

     SECTION 2.15. Restrictive Legends.

     Each Global Note and Physical Note that  constitutes a Restricted  Security
shall bear the  following  legend (the "Private  Placement  Legend") on the face
thereof until after the second  anniversary  of the later of the Issue Date (or,
in the case of Additional  Notes,  the issue date of such Additional  Notes) and
the last date on which the Company or any Affiliate of the Company was the owner
of such Note (or any  predecessor  security) (or such shorter  period of time as
permitted by Rule 144(k) under the  Securities  Act or any  successor  provision
thereunder)  (or  such  longer  period  of time  as may be  required  under  the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof):

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES  ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED  STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.  PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION  HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES  ACT) OR (B) IT IS AN  "ACCREDITED  INVESTOR" (AS DEFINED IN RULE
501(A)(1),  (2),  (3),  OR  (7)  UNDER  THE  SECURITIES  ACT),  (AN  "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S.  PERSON AND IS ACQUIRING  THIS SECURITY IN AN
OFFSHORE  TRANSACTION IN COMPLIANCE  WITH RULE 904 UNDER THE

<PAGE>

                                      -34-

     SECURITIES  ACT,  (2) AGREES  THAT IT WILL NOT  WITHIN TWO YEARS  AFTER THE
ORIGINAL  ISSUANCE OF THIS SECURITY  RESELL OR OTHERWISE  TRANSFER THIS SECURITY
EXCEPT (A) TO MAGNUM  HUNTER  RESOURCES,  INC. OR ANY  SUBSIDIARY  THEREOF,  (B)
INSIDE THE UNITED STATES TO A QUALIFIED  INSTITUTIONAL  BUYER IN COMPLIANCE WITH
RULE  144A  UNDER  THE  SECURITIES  ACT,  (C)  INSIDE  THE  UNITED  STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S.  BROKER-DEALER)  TO THE TRUSTEE A SIGNED LETTER  CONTAINING
CERTAIN  REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS
NOTE),  (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE  TRANSACTION  IN COMPLIANCE
WITH RULE 904 UNDER THE  SECURITIES  ACT (IF  AVAILABLE),  (E)  PURSUANT  TO THE
EXEMPTION  FROM  REGISTRATION  PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE),  (F) IN  ACCORDANCE  WITH ANOTHER  EXEMPTION  FROM THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT (AND  BASED  UPON AN OPINION OF COUNSEL IF
MAGNUM  HUNTER  RESOURCES,  INC. SO  REQUESTS)  OR (G)  PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS  TRANSFERRED A NOTICE  SUBSTANTIALLY  TO
THE EFFECT OF THIS LEGEND.  IN  CONNECTION  WITH ANY  TRANSFER OF THIS  SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL  ISSUANCE OF THIS SECURITY,  IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED  INVESTOR,  THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH  CERTIFICATIONS,  LEGAL  OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY  REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION  FROM,  OR IN A TRANSACTION  NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE  TRANSACTION,"  "UNITED  STATES" AND "U.S.  PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

     Each Global Note shall also bear the following legend on the face thereof:

     UNLESS  AND UNTIL IT IS  EXCHANGED  IN WHOLE OR IN PART FOR  SECURITIES  IN
DEFINITIVE  FORM, THIS SECURITY MAY NOT BE TRANSFERRED  EXCEPT AS A WHOLE BY THE
DEPOSITORY  TO A  NOMINEE  OF THE  DEPOSITORY,  OR BY ANY  SUCH  NOMINEE  OF THE
DEPOSITORY,  OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH  NOMINEE  TO  A  SUCCESSOR  DEPOSITORY  OR  A  NOMINEE  OF  SUCH  SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE  DEPOSITORY  TRUST COMPANY,  A NEW YORK  CORPORATION  ("DTC"),  TO MAGNUM
HUNTER  RESOURCES,  INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE OR
PAYMENT,  AND ANY CERTIFICATE  ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS

<PAGE>

                                      -35-

     REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH  OTHER  ENTITY AS IS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL  SECURITY  SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART,  TO NOMINEES  OF CEDE & CO. OR TO A  SUCCESSOR  THEREOF OR SUCH
SUCCESSOR'S  NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL  SECURITY SHALL BE
LIMITED TO  TRANSFERS  MADE IN  ACCORDANCE  WITH THE  RESTRICTIONS  SET FORTH IN
SECTION 2.17 OF THE INDENTURE.

     SECTION 2.16. Book-Entry Provisions for Global Security.

     (a) The Global Notes  initially  shall (i) be registered in the name of the
Depository or the nominee of such  Depository,  (ii) be delivered to the Trustee
as custodian for such  Depository and (iii) bear legends as set forth in Section
2.15.

     Members of, or participants in, the Depository ("Agent Members") shall have
no rights  under this  Indenture  with  respect to any Global Note held on their
behalf by the Depository,  or the Trustee as its custodian,  or under the Global
Notes,  and the  Depository  may be treated by the Company,  the Trustee and any
Agent of the  Company or the Trustee as the  absolute  owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any Agent of the Company or the Trustee from
giving  effect  to any  written  certification,  proxy  or  other  authorization
furnished by the  Depository or impair,  as between the Depository and its Agent
Members,  the  operation of customary  practices  governing  the exercise of the
rights of a Holder of any Note.

     (b) Transfers of a Global Note shall be limited to transfers in whole,  but
not in part, to the  Depository,  its successors or their  respective  nominees.
Interests of beneficial  owners in a Global Note may be transferred or exchanged
for Physical Notes in accordance with the rules and procedures of the Depository
and the  provisions  of Section  2.17.  In  addition,  Physical  Notes  shall be
transferred to all beneficial owners in exchange for their beneficial  interests
in a Global Note if (i) the Depository notifies the Company that it is unwilling
or unable  to  continue  as  Depository  for the  Global  Notes and a  successor
depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of  Default  has  occurred  and is  continuing  and the  Registrar  has
received a written request from the Depository to issue Physical Notes.

     (c) In  connection  with any  transfer  or  exchange  of a  portion  of the
beneficial  interest in a Global Note to beneficial owners pursuant to paragraph
(b),  the  Registrar  shall (if one or more  Physical  Notes  are to be  issued)
reflect on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be  transferred,  and the Company shall  execute,
the  Subsidiary  Guarantors  shall

<PAGE>

                                      -36-

     execute Guarantees on, and the Trustee shall authenticate and deliver,  one
or more Physical Notes of like tenor and amount.

     (d) In connection  with the transfer of an entire Global Note to beneficial
owners  pursuant  to  paragraph  (b),  such  Global  Note  shall be deemed to be
surrendered to the Trustee for cancellation,  and the Company shall execute, the
Subsidiary  Guarantors  shall  execute  Guarantees  on  and  the  Trustee  shall
authenticate and deliver,  to each beneficial owner identified by the Depository
in exchange for its beneficial  interest in the Global Note, an equal  aggregate
principal amount of Physical Notes of authorized denominations.

     (e) Any  Physical  Note  constituting  a Restricted  Security  delivered in
exchange  for an  interest in a Global Note  pursuant  to  paragraph  (b) or (c)
shall,  except as otherwise provided by paragraphs  (a)(i)(x) and (d) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.

     (f) The Holder of a Global Note may grant proxies and  otherwise  authorize
any Person,  including Agent Members and Persons that may hold interests through
Agent Members,  to take any action which a Holder is entitled to take under this
Indenture or the Notes.

     SECTION 2.17. Special Transfer Provisions.

     (a) Transfers to Non-QIB  Institutional  Accredited  Investors and Non-U.S.
Persons.  The following  provisions shall apply with respect to the registration
of any proposed  transfer of a Note  constituting  a Restricted  Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:

     (i) the Registrar  shall  register the transfer of any Note  constituting a
Restricted  Security,  whether  or not such  Note  bears the  Private  Placement
Legend,  if (x) the requested  transfer is after the second  anniversary  of the
Issue  Date (or,  with  respect  to  Additional  Notes,  the issue  date of such
Additional Notes); provided, however, that neither the Company nor any Affiliate
of the  Company  has held any  beneficial  interest  in such  Note,  or  portion
thereof,  at any time on or prior to the  second  anniversary  of the Issue Date
(or, with respect to Additional  Notes, the issue date of such Additional Notes)
or (y) (1) in the case of a transfer  to an  Institutional  Accredited  Investor
which is not a QIB (excluding  Non-U.S.  Persons),  the proposed  transferee has
delivered to the Registrar a certificate  substantially in the form of Exhibit C
hereto and the proposed  transferor has delivered to the Registrar a certificate
substantially  in the form of  Exhibit F hereto or (2) in the case of a transfer
to a Non-U.S.  Person,  the proposed  transferor  has delivered to the Registrar
certificates  substantially  in the form of  Exhibit D and  Exhibit F hereto and
with respect to clauses (1) and (2),  such  certifications,  legal  opinions and
other information as the Trustee and the Company may reasonably request; and

     (ii) if the  proposed  transferee  is an Agent  Member  and the Notes to be
transferred  consist of Physical  Notes which after transfer are to be evidenced
by an interest in a Global Note,  upon  receipt by the  Registrar of (x) written
instructions  given in  accordance  with the  Depository's  and the  Registrar's
procedures and (y) the appropriate  certificate,  if any,

<page>

                                      -37-

     required by clause (y) of paragraph (i) above, the Registrar shall register
the  transfer  and  reflect on its books and records the date and an increase in
the  principal  amount of such Global Note,  in an amount equal to the principal
amount of Physical  Notes to be  transferred,  and the Trustee  shall cancel the
Physical Notes so transferred; and

     (iii) if the proposed  transferor is an Agent Member seeking to transfer an
interest  in a  Global  Note,  upon  receipt  by the  Registrar  of (x)  written
instructions  given in  accordance  with the  Depository's  and the  Registrar's
procedures and (y) the appropriate  certificate,  if any, required by clause (y)
of paragraph (i) above, the Registrar shall register the transfer and reflect on
its books and records the date and (A) a decrease in the principal amount of the
Global Note from which such  interests are to be  transferred in an amount equal
to the principal  amount of the Notes to be  transferred  and (B) an increase in
the  principal  amount of the Global Note,  in an amount equal to the  principal
amount of the Notes to be transferred.

     (b) Transfers to QIBs. The following provisions shall apply with respect to
the  registration of any proposed  transfer of a Note  constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):

     (i) the  Registrar  shall  register the transfer if such  transfer is being
made by a proposed  transferor  who has delivered to the Registrar a certificate
substantially  in the form of Exhibit F hereto and has checked the box  provided
for on such certificate  stating,  or has otherwise  advised the Company and the
Registrar  in  writing,  that  the sale has  been  made in  compliance  with the
provisions  of  Rule  144A to a  transferee  who has  signed  the  certification
provided for on such certificate  stating,  or has otherwise advised the Company
and the Registrar in writing, that it is purchasing the Note for its own account
or an account with respect to which it exercises sole investment  discretion and
that it and any such  account is a QIB within the  meaning of Rule 144A,  and is
aware  that  the  sale  to it is  being  made  in  reliance  on  Rule  144A  and
acknowledges  that it has received such information  regarding the Company as it
has  requested  pursuant  to Rule 144A or has  determined  not to  request  such
information  and  that it is aware  that  the  transferor  is  relying  upon its
foregoing  representations  in order to claim the  exemption  from  registration
provided by Rule 144A; and

     (ii) if the proposed  transferee  is an Agent  Member,  and the Notes to be
transferred  consist of Physical  Notes which after transfer are to be evidenced
by an  interest  in a Global  Note,  upon  receipt by the  Registrar  of written
instructions  given in  accordance  with the  Depository's  and the  Registrar's
procedures, the Registrar shall reflect on its books and records the date and an
increase in the  principal  amount of such Global Note in an amount equal to the
principal amount of the Physical Notes to be transferred,  and the Trustee shall
cancel the Physical Notes so transferred; and

     (iii) if the proposed  transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of written instructions
given in accordance with the  Depository's and the Registrar's  procedures,  the
Registrar  shall  register the transfer and reflect on its books and records the
date and (A) a decrease in the principal  amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred and

<page>

                                      -38-

     (B) an  increase  in the  principal  amount of the Global Note in an amount
equal to the principal amount of the Notes to be transferred.

     (c) Restrictions on Transfer and Exchange of Global Notes.  Notwithstanding
any other provisions of this Indenture,  a Global Note may not be transferred as
a whole except by the  Depository to a nominee of the Depository or by a nominee
of the  Depository  to  the  Depository  or  any  such  nominee  to a  successor
Depository or a nominee of such successor Depository.

     (d) Private Placement Legend. Upon the transfer, exchange or replacement of
Notes not bearing the Private  Placement  Legend,  the  Registrar  shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or  replacement  of Notes bearing the Private  Placement  Legend,  the Registrar
shall deliver only Notes that bear the Private  Placement  Legend unless (i) the
requested transfer is after the second anniversary of the Issue Date;  provided,
however,  that neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Note, or portion thereof, at any time prior to or on
the second  anniversary of the Issue Date (or, with respect to Additional Notes,
the issue date of such  Additional  Notes),  or (ii) there is  delivered  to the
Registrar an Opinion of Counsel  reasonably  satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related  restrictions  on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.

     (e) General.  By its  acceptance of any Note bearing the Private  Placement
Legend,  each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this  Indenture and in the Private  Placement  Legend and
agrees that it will transfer such Note only as provided in this Indenture.

     The Registrar shall retain copies of all letters, notices and other written
communications  received  pursuant to Section  2.16 or this  Section  2.17.  The
Company  shall have the right to inspect  and make  copies of all such  letters,
notices  or other  written  communications  at any  reasonable  time  during the
Registrar's  normal business hours upon the giving of reasonable  written notice
to the Registrar.

     (f) Transfers of Notes Held by Affiliates. Any certificate (i) evidencing a
Note that has been  transferred  to an Affiliate of the Company within two years
after the Issue Date (or,  with respect to Additional  Notes,  the issue date of
such  Additional  Notes),  as evidenced by a notation on the Assignment Form for
such transfer or in the  representation  letter  delivered in respect thereof or
(ii)  evidencing a Note that has been acquired from an Affiliate  (other than by
an  Affiliate)  in a transaction  or a chain of  transactions  not involving any
public offering, shall, until two years after the last date on which the Company
or any Affiliate of the Company was an owner of such Note, in each case,  bear a
legend  in  substantially  the  form of the  Private  Placement  Legend,  unless
otherwise agreed by the Company (with written notice thereof to the Trustee).

<page>

                                      -39-

     SECTION 2.18. Additional Interest Under Registration Rights Agreement.

     Under  certain  circumstances,  the  Company  shall  be  obligated  to  pay
Additional Interest to the Holders,  all as set forth in the Registration Rights
Agreement. The terms thereof are hereby incorporated herein by reference.

     SECTION 2.19. Designation.

     The  Indebtedness  evidenced  by the  Notes  and the  Guarantees  is hereby
irrevocably  designated  as "senior  indebtedness"  or such other term  denoting
seniority for the purposes of any other existing or future  Indebtedness  of the
Company or a Guarantor, as the case may be, which the Company or such Guarantor,
as the case may be, makes subordinate to any senior (or such other term denoting
seniority) indebtedness of such Person.


                                  ARTICLE THREE

                                   REDEMPTION


     SECTION 3.01. Notices to Trustee.

     If the Company elects to redeem Notes pursuant to Paragraph 5 of the Notes,
it shall  notify the Trustee and the Paying  Agent in writing of the  Redemption
Date and the principal amount of the Notes to be redeemed.

     The Company  shall give each notice  provided  for in this  Section 3.01 60
days  before  the  Redemption  Date  (unless a shorter  notice  period  shall be
satisfactory  to the Trustee,  as evidenced in a writing signed on behalf of the
Trustee),  together with an Officers'  Certificate  stating that such redemption
shall comply with the conditions contained herein and in the Notes.

     SECTION 3.02. Selection of Notes To Be Redeemed.

     In the event  that less  than all of the  Notes are to be  redeemed  at any
time,  selection of such Notes, or portions thereof, for redemption will be made
by the Trustee  either in  compliance  with the  requirements  of the  principal
national securities  exchange,  if any, on which the Notes are listed or, if the
Notes  are not then  listed on a  national  securities  exchange,  on a pro rata
basis,  by lot or by such  other  method  as the  Trustee  shall  deem  fair and
appropriate.  No Notes of a principal amount of $1,000 or less shall be redeemed
in part.  If a  partial  redemption  is made  with  the  proceeds  of an  Equity
Offering,  selection of the Notes or portions  thereof for  redemption  shall be
made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as
is practicable (subject to the procedures of the Depository), unless such method
is otherwise  prohibited.  Notice of redemption  shall be mailed by  first-class
mail at least 30 but not more than 60 days  before the  Redemption  Date to each
Holder of Notes to be redeemed at its registered  address.  If any Note is to be
redeemed in part only, the notice of redemption  that relates to such Note shall
state the portion of the principal amount thereof to be redeemed.  A new Note in
a principal amount equal to the unredeemed portion thereof will be issued

<page>

                                      -40-

     in the name of the Holder thereof upon  cancellation  of the original Note.
On and after the applicable  Redemption  Date,  interest will cease to accrue on
Notes or  portions  thereof  called for  redemption  as long as the  Company has
deposited  with the  Paying  Agent for the Notes  funds in  satisfaction  of the
applicable Redemption Price.

     SECTION 3.03. Optional Redemption.

     The Notes will be redeemable, at the Company's option, in whole at any time
or in part from time to time, on and after March 15, 2007, upon not less than 30
nor more than 60 days' notice, at the following  Redemption Prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on March 15 of the years set forth below,  plus, in each case,
accrued interest, if any, thereon to the date of redemption:

  Year                                                   Percentage
  ----                                                   ----------
  2007......................................              104.800%
  2008......................................              103.200%
  2009......................................              101.600%
  2010 and thereafter.......................              100.000%

     At any time,  or from  time to time,  on or prior to March  15,  2005,  the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity  Offerings to redeem up to 35% of the aggregate  principal amount
of the Notes  issued at a  redemption  price equal to 109.600% of the  aggregate
principal  amount of the Notes to be redeemed,  plus accrued  interest,  if any,
thereon  to the date of  redemption;  provided,  that:  (1) at least  65% of the
aggregate principal amount of Notes issued remains outstanding immediately after
giving effect to any such redemption;  and (2) the Company makes such redemption
not more than 60 days after the consummation of any such Equity Offering.

     SECTION 3.04. Notice of Redemption.

     In connection with a redemption  pursuant to Section 3.03, at least 30 days
but not more than 60 days before a Redemption  Date,  the Company  shall mail or
cause to be mailed a notice of  redemption by first class mail to each Holder of
Notes to be redeemed at its registered  address,  with a copy to the Trustee and
any Paying Agent. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. The Company shall
provide such notices of  redemption  to the Trustee at least five  Business Days
before the intended mailing date.

     Each notice of redemption  shall identify  (including the CUSIP number) the
Notes to be redeemed and shall state:

     (1) the Redemption Date;

     (2) the Redemption Price and the amount of accrued interest,  if any, to be
paid;

<page>

                                      -41-

     (3) the name and address of the Paying Agent;

     (4) the  subparagraph  of the Notes  pursuant to which such  redemption  is
being made;

     (5) that Notes  called for  redemption  must be  surrendered  to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;

     (6) that,  unless the Company  defaults in making the  redemption  payment,
interest on Notes or applicable portions thereof called for redemption ceases to
accrue on and after the Redemption  Date,  and the only  remaining  right of the
Holders of such Notes is to receive payment of the Redemption Price plus accrued
interest as of the  Redemption  Date, if any, upon surrender to the Paying Agent
of the Notes redeemed;

     (7) if any Note is being  redeemed in part,  the  portion of the  principal
amount of such Note to be redeemed and that, after the Redemption Date, and upon
surrender of such Note, a new Note or Notes in the  aggregate  principal  amount
equal to the unredeemed portion thereof will be issued; and

     (8) if fewer than all the Notes are to be redeemed,  the  identification of
the  particular  Notes  (or  portion  thereof)  to be  redeemed,  as well as the
aggregate  principal amount of Notes to be redeemed and the aggregate  principal
amount of Notes to be outstanding after such partial redemption.

     The  Company  will  comply  with the  requirements  of Rule 14e-1 under the
Exchange Act and any other  securities  laws and  regulations  thereunder to the
extent such laws and  regulations are applicable in connection with the purchase
of Notes.

     SECTION 3.05. Effect of Notice of Redemption.

     Once notice of redemption is mailed in accordance  with Section 3.04,  such
notice of redemption  shall be irrevocable and Notes called for redemption shall
become due and payable on the Redemption  Date and at the Redemption  Price plus
accrued  interest  as of such date,  if any.  Upon  surrender  to the Trustee or
Paying Agent,  such Notes called for redemption  shall be paid at the Redemption
Price plus accrued  interest thereon to the Redemption Date, but installments of
interest,  the maturity of which is on or prior to the Redemption Date, shall be
payable to Holders of record at the close of  business  on the  relevant  Record
Dates referred to in the Notes. Interest shall accrue on or after the Redemption
Date and  shall be  payable  only if the  Company  defaults  in  payment  of the
Redemption Price.

     SECTION 3.06. Deposit of Redemption Price.

     On or before the Redemption  Date and in accordance  with Section 2.14, the
Company shall deposit with the Paying Agent U.S. Legal Tender  sufficient to pay
the Redemption Price plus accrued interest,  if any, of all Notes to be redeemed
on that date.  The Paying  Agent shall  promptly

<page>

                                      -42-

     return to the  Company  any U.S.  Legal  Tender so  deposited  which is not
required for that purpose,  except with respect to monies owed as obligations to
the Trustee pursuant to Article Seven.

     Unless the Company fails to comply with the preceding paragraph and default
in the payment of such Redemption Price plus accrued interest,  if any, interest
on the Notes to be  redeemed  will  cease to accrue on and after the  applicable
Redemption Date, whether or not such Notes are presented for payment.

     SECTION 3.07. Notes Redeemed in Part.

     Upon  surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to the
unredeemed portion of the Note surrendered.

                                  ARTICLE FOUR

                                    COVENANTS


     SECTION 4.01. Payment of Notes.

     (a) The Company shall pay the principal of,  premium,  if any, and interest
on the Notes on the dates and in the  manner  provided  in the Notes and in this
Indenture.

     (b) An  installment  of  principal  of or  interest  on the Notes  shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates)  holds,  prior to 11:00 a.m. New York City
time on that date,  U.S.  Legal Tender  designated for and sufficient to pay the
installment in full and is not prohibited  from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.

     (c)  Notwithstanding  anything to the contrary contained in this Indenture,
the  Company  may,  to the  extent  it is  required  to do so by law,  deduct or
withhold  income or other  similar taxes imposed by the United States of America
from principal or interest payments hereunder.

     SECTION 4.02. Maintenance of Office or Agency.

     The Company  shall  maintain the office or agency  required  under  Section
2.03.  The  Company  shall  give  prior  written  notice to the  Trustee  of the
location,  and any change in the location,  of such office or agency.  If at any
time the Company  shall fail to maintain any such  required  office or agency or
shall fail to furnish the Trustee with the address thereof,  such presentations,
surrenders,  notices  and  demands  may be made or served at the  address of the
Trustee set forth in Section 11.02.

<page>

                                      -43-

     SECTION 4.03. Corporate Existence.

     Except as otherwise  permitted  by Article  Five,  the Company  shall do or
cause to be done, at its own cost and expense,  all things necessary to preserve
and keep in full force and effect its  corporate  existence and the corporate or
organizational  existence of each of its Restricted  Subsidiaries  in accordance
with the respective  organizational documents of each such Restricted Subsidiary
and the material  rights  (charter and  statutory) and franchises of the Company
and each such Restricted Subsidiary;  provided,  however, that the Company shall
not be required to  preserve,  with  respect to itself,  any  material  right or
franchise  and,  with respect to any of its  Restricted  Subsidiaries,  any such
existence, material right or franchise, if the Board of Directors of the Company
shall  determine  in good  faith  that the  preservation  thereof  is no  longer
desirable  in the conduct of the  business of the Company and its  Subsidiaries,
taken as a whole.

     SECTION 4.04. Payment of Taxes and Other Claims.

     The  Company  shall  pay or  discharge  or cause to be paid or  discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental  charges (including  withholding taxes and any penalties,  interest
and  additions  to taxes)  levied or  imposed  upon it or any of its  Restricted
Subsidiaries or properties of it or any of its Restricted  Subsidiaries and (ii)
all material  lawful claims for labor,  materials and supplies  that, if unpaid,
might  by law  become a Lien  upon the  property  of the  Company  or any of its
Restricted  Subsidiaries;  provided,  however,  that the  Company  shall  not be
required to pay or  discharge  or cause to be paid or  discharged  any such tax,
assessment,  charge or claim whose  amount,  applicability  or validity is being
contested in good faith by  appropriate  negotiations  or  proceedings  properly
instituted and diligently  conducted for which adequate reserves,  to the extent
required under GAAP, have been taken.

     SECTION 4.05. Maintenance of Properties and Insurance.

     (a) The Company shall, and shall cause each of the Restricted  Subsidiaries
to,  maintain  all  properties  used or useful in the conduct of its business in
good working  order and  condition  (subject to ordinary wear and tear) and make
all  necessary  repairs,  renewals,  replacements,  additions,  betterments  and
improvements  thereto and actively conduct and carry on its business;  provided,
however,  that nothing in this Section 4.05 shall  prevent the Company or any of
the Restricted  Subsidiaries from discontinuing the operation and maintenance of
any of its properties,  if such  discontinuance is (i) in the ordinary course of
business pursuant to customary business terms or (ii) in the good faith judgment
of the respective  Boards of Directors or other governing body of the Company or
Restricted  Subsidiary,  as the case may be,  desirable  in the conduct of their
respective  businesses and is not disadvantageous in any material respect to the
Holders.

     (b) The Company shall provide or cause to be provided,  for itself and each
of the Restricted Subsidiaries, insurance (including appropriate self-insurance)
against  loss or damage of the kinds  that,  in the good faith  judgment  of the
Company,  are  adequate and  appropriate  for the conduct of the business of the
Company and its  Restricted  Subsidiaries  in a prudent  manner,  with reputable
insurers or with the  government of the United  States of America,  Canada or an
agency or

<page>

                                      -44-

     instrumentality  thereof,  in such amounts,  with such deductibles,  and by
such methods as shall be customary,  in the good faith  judgment of the Company,
for companies similarly situated in the industry.

     SECTION 4.06. Compliance Certificate; Notice of Default.

     (a) The Company shall deliver to the Trustee, within 105 days after the end
of each of its fiscal quarters and fiscal years, an Officers' Certificate of the
Company (provided,  however,  that one of the signatories to each such Officers'
Certificate  must  state  that he or she is the  Company's  principal  executive
officer,  principal financial officer or principal  accounting  officer),  as to
such Officers' knowledge,  without independent  investigation,  of the Company's
compliance  with all  conditions  and covenants  under this  Indenture  (without
regard to any period of grace or requirement of notice  provided  hereunder) and
in the event any Default of the Company exists,  such Officers shall specify the
nature of such Default.  Each such Officers'  Certificate  shall also notify the
Trustee  should  the  Company  elect to change  the manner in which it fixes its
fiscal year end.

     (b) So long as not  contrary  to the then  current  recommendations  of the
American  Institute  of  Certified  Public  Accountants,  the  annual  financial
statements  delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent certified public accountants (who shall be a
firm  of  established   national   reputation)  stating  (A)  that  their  audit
examination has included a review of the terms of this Indenture and the form of
the Notes as they relate to accounting  matters,  and (B) whether, in connection
with their audit examination,  any Default or Event of Default has come to their
attention and if such a Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; provided,  however, that,
without  any  restriction  as to  the  scope  of  the  audit  examination,  such
independent  certified public  accountants  shall not be liable by reason of any
failure to obtain  knowledge  of any such Default or Event of Default that would
not be disclosed in the course of an audit  examination  conducted in accordance
with generally accepted auditing standards.

     (c) (i) If any Default or Event of Default has occurred  and is  continuing
or (ii) if any Holder seeks to exercise any remedy  hereunder  with respect to a
claimed Default under this Indenture or the Notes,  the Company shall deliver to
the Trustee,  at its address set forth in Section 11.02 hereof, by registered or
certified mail or by facsimile  transmission followed by hard copy by registered
or certified  mail an Officers'  Certificate  specifying  such event,  notice or
other action within 10 days of its becoming aware of such occurrence.

     SECTION 4.07. Compliance with Laws.

     The  Company  shall  comply,   and  shall  cause  each  of  its  Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America,  all states and municipalities
thereof,  and of any  governmental  department,  commission,  board,  regulatory
authority,  bureau,  agency and instrumentality of the foregoing,  in respect of
the conduct of their respective businesses and the ownership of their respective
properties,  except  for such  noncompliances  as  could  not  singly  or in the
aggregate  reasonably  be  expected  to have a  material  adverse  effect on the
financial  condition or results of operations of the Company and its  Restricted
Subsidiaries taken as a whole.

<page>

                                      -45-

     SECTION 4.08. Reports to Holders.

     The Company will deliver to the Trustee  within 15 days after filing of the
same with the Commission,  copies of the quarterly and annual reports and of the
information,  documents and other reports, if any, which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding   that  the  Company  may  not  be  subject  to  the   reporting
requirements  of Section 13 or 15(d) of the Exchange  Act, the Company will file
with the  Commission,  to the extent  permitted,  and  provide  the  Trustee and
Holders  with such annual  reports  and such  information,  documents  and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the other provisions of Section 314(a) of the TIA.

     SECTION 4.09. Waiver of Stay, Extension or Usury Laws.

     The Company  covenants (to the extent that they may lawfully do so) that it
will not at any time insist upon,  plead, or in any manner  whatsoever  claim or
take the benefit or advantage  of, any stay or extension law or any usury law or
other law that would  prohibit  or forgive  the  Company  from paying all or any
portion of the  principal  of or interest on the Notes as  contemplated  herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that they may
lawfully do so) the Company hereby  expressly waives all benefit or advantage of
any such  law,  and  covenants  that it will not  hinder,  delay or  impede  the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.

     SECTION 4.10. Limitation on Restricted Payments.

     The Company  will not,  and will not cause or permit any of its  Restricted
Subsidiaries to, directly or indirectly:

     (1)  declare  or pay any  dividend  or make any  distribution  (other  than
dividends or distributions made to the Company or any Restricted  Subsidiary and
other than any dividends or  distributions  payable solely in Qualified  Capital
Stock of the  Company)  on or in respect of shares of the  Capital  Stock of the
Company or any Restricted Subsidiary to holders of such Capital Stock;

     (2) purchase,  redeem or otherwise  acquire or retire for value any Capital
Stock of the  Company  or any  Restricted  Subsidiary  other  than  through  the
exchange therefor solely of Qualified Capital Stock of the Company;

     (3) make any  principal  payment on,  purchase,  defease,  redeem,  prepay,
decrease or otherwise acquire or retire for value,  prior to any scheduled final
maturity,   scheduled   repayment  or  scheduled   sinking  fund  payment,   any
Indebtedness  of the Company or a Subsidiary  Guarantor  that is  subordinate or
junior  in  right  of  payment  to the  Notes  or  such  Subsidiary  Guarantor's
Guarantee, as the case may be; or

<page>

                                      -46-

     (4) make any Investment  (other than a Permitted  Investment)  (each of the
foregoing  actions set forth in clauses (1), (2), (3) and (4) being  referred to
as a "Restricted Payment");

     if at the time of such  Restricted  Payment  or  immediately  after  giving
effect thereto,

     (i) a Default or an Event of Default shall have occurred and be continuing;

     (ii)  the  Company  is not able to  incur  at  least  $1.00  of  additional
Indebtedness  (other than  Permitted  Indebtedness)  in compliance  with Section
4.12; or

     (iii) the aggregate amount of Restricted  Payments (including such proposed
Restricted  Payment) made on or after  January 1, 2002 (the amount  expended for
such  purposes,  if other  than in cash,  being  the fair  market  value of such
property as determined reasonably and in good faith by the Board of Directors of
the Company) shall exceed the sum of:

     (u) $25.0 million; plus

     (v)  50%  of the  cumulative  Consolidated  Net  Income  (or if  cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
earned  on or after  January  1,  2002  and on or prior to the last  date of the
Company's  fiscal quarter  immediately  preceding such  Restricted  Payment (the
"Reference Date") (treating such period as a single accounting period); plus

     (w) 100% of the  aggregate net cash  proceeds,  or the fair market value of
Property other than cash,  received by the Company from any Person (other than a
Restricted  Subsidiary  of the  Company)  from the issuance and sale on or after
January 1, 2002 and on or prior to the Reference Date of Qualified Capital Stock
of the Company; plus

     (x) without  duplication of any amounts  included in clause (iii)(w) above,
100% of the aggregate net cash proceeds of any equity  contribution  received by
the Company from a holder of the Company's Capital Stock (excluding, in the case
of clauses  (iii)(w) and (x), any net cash proceeds  from an Equity  Offering to
the extent used to redeem the Notes); plus

     (y) an amount equal to the net  reduction in  Investments  in  Unrestricted
Subsidiaries resulting from dividends, interest payments, repayments of loans or
advances,  or other  transfers of cash or Properties  (including  transfers as a
result  of a merger  or  liquidation),  in each  case to the  Company  or to any
Restricted Subsidiary of the Company from Unrestricted Subsidiaries (but without
duplication of any such amount included in calculating  cumulative  Consolidated
Net Income of the Company), or from redesignations of Unrestricted  Subsidiaries
as Restricted  Subsidiaries  (in each case valued as

<page>

                                      -47-

     provided in Section 4.14),  not to exceed,  in the case of any Unrestricted
Subsidiary,  the amount of  Investments  previously  made by the  Company or any
Restricted Subsidiary in such Unrestricted Subsidiary and which was treated as a
Restricted Payment hereunder; plus

     (z) without  duplication  of the  immediately  preceding  subclause (y), an
amount equal to the lesser of the cost or net cash  proceeds  received  upon the
sale or other  disposition  of any  Investment  made on or after January 1, 2002
which had been treated as a Restricted  Payment (but without  duplication of any
such amount included in calculating  cumulative  Consolidated  Net Income of the
Company).

     Notwithstanding the foregoing,  the provisions set forth in the immediately
preceding paragraph shall not prohibit:

     (1) the payment of any dividend or redemption  payment within 60 days after
the date of  declaration  of such dividend or the  applicable  redemption if the
dividend or redemption payment, as the case may be, would have been permitted on
the date of declaration;

     (2)  if no  Default  or  Event  of  Default  shall  have  occurred  and  be
continuing,  the  acquisition  of any Capital  Stock of the Company,  either (i)
solely in exchange for  Qualified  Capital  Stock of the Company or (ii) through
the  application  of net proceeds of a sale for cash (other than to a Restricted
Subsidiary of the Company) of Qualified  Capital Stock of the Company  within 90
days before or within 5 days after such acquisition;

     (3)  if no  Default  or  Event  of  Default  shall  have  occurred  and  be
continuing,  the  acquisition of any  Indebtedness  of the Company or Subsidiary
Guarantor that is subordinate or junior in right of payment to the Notes or such
Subsidiary  Guarantor's  Guarantee,  as the case may be,  either  (i)  solely in
exchange  for  Qualified  Capital  Stock of the  Company,  or (ii)  through  the
application of net proceeds of a  substantially  concurrent sale for cash (other
than to a Restricted  Subsidiary of the Company) of (a) Qualified  Capital Stock
of the Company or (b) Refinancing Indebtedness;

     (4)  if no  Default  or  Event  of  Default  shall  have  occurred  and  be
continuing, the payment of dividends on the TCW Preferred Stock; and

     (5)  the  initial  designation  of  Hunter  Butcher  International  Limited
Liability  Company,   Canvasback  Energy,  Inc.  and  Redhead  Energy,  Inc.  as
Unrestricted  Subsidiaries (such designation shall be deemed to have occurred on
December 31, 2001).

     In determining the aggregate amount of Restricted Payments made on or after
January 1, 2002 in  accordance  with clause (iii) of the  immediately  preceding
paragraph,  amounts expended  pursuant to clauses (1), (2), (3) and (4) shall be
included in such calculation.

<page>

                                      -48-

     SECTION 4.11. Limitations on Transactions with Affiliates.

     The Company  will not,  and will not cause or permit any of its  Restricted
Subsidiaries  to, directly or indirectly,  enter into, amend or permit or suffer
to exist any transaction or series of related transactions  (including,  without
limitation,  the  purchase,  sale,  lease  or  exchange  of  any  property,  the
guaranteeing  of any  Indebtedness or the rendering of any service) with, or for
the  benefit  of,  any  of  their  respective  Affiliates  (each  an  "Affiliate
Transaction"),  other than (x) Affiliate  Transactions permitted under the third
paragraph of this Section 4.11 and (y) Affiliate  Transactions that are on terms
that  are  fair and  reasonable  to the  Company  or the  applicable  Restricted
Subsidiary and are no less favorable to the Company or the applicable Restricted
Subsidiary  than those that might  reasonably have been obtained in a comparable
transaction at such time on an  arm's-length  basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary.

     All  Affiliate   Transactions   (and  each  series  of  related   Affiliate
Transactions  which are similar or part of a common  plan)  involving  aggregate
payments or other  property  with a fair market  value in excess of $5.0 million
shall be approved by the Board of Directors of the Company,  such approval to be
evidenced  by a Board  Resolution  stating  that  such  Board of  Directors  has
determined that such transaction complies with the foregoing provisions.  If the
Company or any Restricted  Subsidiary enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate  fair market value of more than $15.0  million,  the Company shall,
prior to the consummation thereof, obtain a favorable opinion as to the fairness
of such  transaction  or series of related  transactions  to the  Company or the
relevant  Restricted  Subsidiary,  as the case may be, from a financial point of
view, from an Independent Advisor and file the same with the Trustee.

     The  requirements  set  forth in the first and  second  paragraphs  of this
Section 4.11 shall not apply to:

     (1)  reasonable  fees and  compensation  paid to and indemnity  provided on
behalf of, officers,  directors,  employees or consultants of the Company or any
Restricted  Subsidiary  as determined in good faith by the Board of Directors or
senior management of the Company or such Restricted Subsidiary,  as the case may
be;

     (2)  transactions  exclusively  between or among the Company and any of its
Restricted   Subsidiaries  or  exclusively  between  or  among  such  Restricted
Subsidiaries;  provided,  however,  that  such  transactions  are not  otherwise
prohibited hereunder; and

     (3) Restricted Payments permitted hereunder.

     SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.

     Other than Permitted Indebtedness, the Company will not, and will not cause
or permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume,  guarantee,  acquire,  become liable,  contingently or otherwise,
with respect to, or otherwise become  responsible for payment of  (collectively,
"incur")   any   Indebtedness   (including,    without   limitation,    Acquired
Indebtedness);  provided,  however, that if no Default or Event of Default shall
have  occurred  and be

<page>

                                      -49-

     continuing at the time of or as a consequence of the incurrence of any such
Indebtedness,  the Company and the  Restricted  Subsidiaries  or any of them may
incur  Indebtedness,  in each  case,  if on the date of the  incurrence  of such
Indebtedness,  after giving pro forma effect to the  incurrence  thereof and the
receipt and application of the proceeds  therefrom,  the Company's  Consolidated
EBITDA Coverage Ratio would have been greater than 2.50 to 1.0.

     For purposes of determining  any particular  amount of  Indebtedness  under
this  Section  4.12,  guarantees  of  Indebtedness  otherwise  included  in  the
determination of such amount shall not also be included.

     Indebtedness  of a  Person  existing  at the time  such  Person  becomes  a
Restricted Subsidiary (whether by merger, consolidation,  acquisition of Capital
Stock or  otherwise)  or is merged  with or into the  Company or any  Restricted
Subsidiary or which is secured by a Lien on an asset  acquired by the Company or
a  Restricted  Subsidiary  (whether or not such  Indebtedness  is assumed by the
acquiring  Person)  shall be deemed  incurred  at the time the Person  becomes a
Restricted  Subsidiary or at the time of the asset acquisition,  as the case may
be.

     The Company  will not,  and will not permit any  Subsidiary  Guarantor  to,
incur any  Indebtedness  which by its  terms  (or by the terms of any  agreement
governing  such  Indebtedness)  is  subordinated  in  right  of  payment  to any
Indebtedness  of the Company or such Subsidiary  Guarantor,  as the case may be,
other than the Notes and the Guarantees  unless such Indebtedness is also by its
terms  (or by the  terms of any  agreement  governing  such  Indebtedness)  made
expressly  subordinate in right of payment to the Notes or the Guarantee of such
Subsidiary Guarantor,  as the case may be, pursuant to subordination  provisions
that are at least as favorable to the holders of the Notes or such  guarantee as
the subordination provisions of such Indebtedness (or agreement).

     SECTION  4.13.  Limitation  on  Dividend  and  Other  Payment  Restrictions
Affecting Restricted Subsidiaries.

     The Company  will not,  and will not cause or permit any of its  Restricted
Subsidiaries to, directly or indirectly,  create or otherwise cause or permit to
exist or become  effective any  encumbrance or restriction on the ability of any
Restricted Subsidiary to:

     (1) pay dividends or make any other  distributions  on or in respect of its
Capital Stock;

     (2) make loans or advances,  or to pay any Indebtedness or other obligation
owed, to the Company or any other Restricted Subsidiary;

     (3) guarantee any  Indebtedness  or any other  obligation of the Company or
any Restricted Subsidiary; or

     (4)  transfer  any of its  property  or assets to the  Company or any other
Restricted  Subsidiary  (each  such  encumbrance  or  restriction,   a  "Payment
Restriction"),

     except for such  encumbrances or  restrictions  existing under or by reason
of:

<page>

                                      -50-

     (a) applicable law;

     (b)  this   Indenture  or  any  other   indentures   governing  Pari  Passu
Indebtedness;   provided,   however,   that  the  provisions  relating  to  such
encumbrances  or restriction  contained in any such other  indenture are no less
favorable to the Holders in any material  respect as  determined by the Board of
Directors of the Company in their  reasonable  and good faith  judgment than the
provisions  relating  to such  encumbrances  or  restrictions  contained  in the
Indenture;

     (c) the Senior Credit Facility;

     (d)  customary  non-assignment  provisions  of any  contract  or any  lease
governing a leasehold interest of any Restricted Subsidiary;

     (e) any instrument  governing Acquired  Indebtedness,  which encumbrance or
restriction is not applicable to such Restricted  Subsidiary,  or the properties
or assets of such Restricted Subsidiary, other than the Person or the properties
or assets of the Person so acquired;

     (f)  agreements  existing on the Issue Date to the extent and in the manner
such agreements are in effect on the Issue Date;

     (g) customary  restrictions with respect to a Restricted  Subsidiary of the
Company  pursuant to an  agreement  that has been  entered  into for the sale or
disposition  of  Capital  Stock or assets of such  Restricted  Subsidiary  to be
consummated in accordance  with the terms of the Indenture  solely in respect of
the assets or Capital Stock to be sold or disposed of;

     (h) any  instrument  governing a Permitted  Lien, to the extent and only to
the extent such instrument restricts the transfer or other disposition of assets
subject to such Permitted Lien; or

     (i) an agreement governing  Refinancing  Indebtedness incurred to Refinance
the Indebtedness  issued,  assumed or incurred pursuant to an agreement referred
to in clause (b), (c), (e) or (f) above; provided,  however, that the provisions
relating to such  encumbrance or restriction  contained in any such  Refinancing
Indebtedness  are no less  favorable to the Holders in any  material  respect as
determined by the Board of Directors of the Company in their reasonable and good
faith judgment than the provisions  relating to such  encumbrance or restriction
contained in the applicable  agreement  referred to in such clause (b), (c), (e)
or (f).

     SECTION 4.14. Limitation on Restricted and Unrestricted Subsidiaries.

     As the Company or any of its Subsidiaries  forms or acquires  Subsidiaries,
each newly formed or acquired  Subsidiary  shall be  designated by the Company's
Board of Directors as a Restricted  Subsidiary  or an  Unrestricted  Subsidiary,
provided that (1) any Subsidiary of any already existing Unrestricted Subsidiary
shall be (and shall be deemed  designated as) an  Unrestricted  Subsidiary,  (2)
subject  to  the  foregoing  clause  (1),  any  designation  of an  Unrestricted
Subsidiary  shall be effective only if the Investment in that Subsidiary is made
in compliance with Section 4.10 and (3) subject to the foregoing clause (1), any
failure  by the  Company's  Board of  Directors  to

<page>

                                      -51-

     affirmatively  make such a  designation  of a Subsidiary  shall be deemed a
designation  (in  compliance  with  the  Indenture)  of  such  Subsidiary  as  a
Restricted Subsidiary.

     After a Subsidiary of the Company has been  designated  as an  Unrestricted
Subsidiary, the Board of Directors of the Company may, if no Default or Event of
Default would arise therefrom,  redesignate such Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that:

     (1) any such  redesignation  shall be deemed to be an  incurrence as of the
date of such redesignation by the Company and its Restricted Subsidiaries of the
Indebtedness  (if any) of such  redesignated  Subsidiary for purposes of Section
4.10;

     (2) unless such  redesignated  Subsidiary  shall not have any  Indebtedness
outstanding,  other than Indebtedness which would be Permitted Indebtedness,  no
such designation  shall be permitted if immediately  after giving effect to such
redesignation and the incurrence of any such additional Indebtedness the Company
could  not  incur  $1.00  of  additional   Indebtedness  (other  than  Permitted
Indebtedness) pursuant to Section 4.12; and

     (3) such Subsidiary assumes by execution of a supplemental indenture all of
the obligations of a Subsidiary Guarantor under a Guarantee.

     After a  Subsidiary  of the Company  has been  designated  as a  Restricted
Subsidiary,  the Board of  Directors  of the Company  also may, if no Default or
Event of Default would arise therefrom,  redesignate such Restricted  Subsidiary
to be an Unrestricted Subsidiary if such redesignation is at that time permitted
under Section  4.10.  Upon any such  permitted  redesignation,  such  Restricted
Subsidiary's Guarantee will be released.

     Any such designation or redesignation of an Unrestricted  Subsidiary by the
Board of  Directors  shall be  evidenced  to the  Trustee by the filing with the
Trustee of a certified copy of the  resolution of the Board of Directors  giving
effect  to  such  designation  or  redesignation  and an  Officers'  Certificate
certifying that such  designation or  redesignation  complied with the foregoing
conditions and setting forth in reasonable detail the underlying calculations.

     For purposes of Section 4.10:

     (1) an  "Investment"  shall be  deemed  to have  been  made at the time any
Restricted  Subsidiary is designated as an Unrestricted  Subsidiary in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to the
net  worth of such  Restricted  Subsidiary  at the  time  that  such  Restricted
Subsidiary  is  designated  as an  Unrestricted  Subsidiary  ("net  worth" to be
calculated  based upon the fair market value of the assets of such Subsidiary as
of any such date of designation); and

     (2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer.

<page>

                                      -52-

     Notwithstanding the foregoing,  the Board of Directors may not designate or
redesignate any Subsidiary of the Company to be an  Unrestricted  Subsidiary if,
after such designation or redesignation:

                  (1)      the Company or any Restricted Subsidiary:

     (a) provides  credit  support for, or a guarantee of, any  Indebtedness  of
such Subsidiary  (including any undertaking,  agreement or instrument evidencing
such Indebtedness); or

     (b)  is  directly  or  indirectly  liable  for  any  Indebtedness  of  such
Subsidiary; or

     (2) such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any  property of, any  Restricted  Subsidiary  which is not a Subsidiary  of the
Subsidiary to be so designated.

     SECTION 4.15. Change of Control.

     Upon the occurrence of a Change of Control, each Holder will have the right
to require  that the Company  purchase all or a portion of such  Holder's  Notes
pursuant to the offer  described  below (the  "Change of Control  Offer"),  at a
purchase  price equal to 101% of the  principal  amount  thereof,  plus  accrued
interest, if any, thereon to the date of purchase.

     Within  30 days  following  the date  upon  which  the  Change  of  Control
occurred, the Company must send, by first class mail, a notice to each Holder at
such Holder's last registered address, with a copy to the Trustee,  which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Notes  pursuant to the Change of Control  Offer.  Such notice shall state
that:

     (a) the Change of  Control  Offer is being made  pursuant  to this  Section
4.15;

     (b) all Notes tendered and not withdrawn will be accepted for payment;

     (c) the  Change  of  Control  Offer  shall  remain  open for a period of 20
Business Days or such longer period as may be required by law;

     (d) the purchase price  (including the amount of accrued  interest) and the
purchase  date (which shall be not less than 30 nor more than 45 days  following
the date such notice is mailed  (other than may be required by law (the  "Change
of Control Offer Payment Date");

     (e) any Note not tendered will continue to accrue interest;

     (f)  unless the  Company  defaults  in making  payment  therefor,  any Note
accepted  for  payment  pursuant  to the Change of Control  Offer shall cease to
accrue interest after the Change of Control Offer Payment Date;

<page>

                                      -53-

     (g)  Holders  electing  to have a Note  purchased  pursuant  to a Change of
Control  Offer will be required to surrender  the Note,  with the form  entitled
"Option of Holder to Elect  Purchase" on the reverse of the Note  completed,  to
the Paying  Agent at the address  specified  in the notice prior to the close of
business on the third  Business Day prior to the Change of Control Offer Payment
Date;

     (h) Holders will be entitled to withdraw their election if the Paying Agent
receives,  not later than the second Business Day prior to the Change of Control
Offer Payment Date, a telegram,  telex, facsimile transmission or letter setting
forth the name of the  Holder,  the  principal  amount  of the Notes the  Holder
delivered  for  purchase  and a statement  that such Holder is  withdrawing  his
election to have such Note purchased;

     (i) Holders whose Notes are purchased only in part will be issued new Notes
in a principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall be in
an original principal amount of $1,000 or integral multiples thereof; and

     (j) the circumstances and relevant facts regarding such Change of Control.

     On or before the Change of Control Offer  Payment  Date,  the Company shall
(a) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer,  (b) deposit with the Paying Agent in accordance  with Section
2.14 U.S.  Legal  Tender  sufficient  to pay the  purchase  price  plus  accrued
interest,  if any, of all Notes so tendered to be  purchased  and (c) deliver to
the Trustee Notes so accepted together with an Officers' Certificate stating the
Notes or portions  thereof being  purchased by the Company.  Upon receipt by the
Paying  Agent of the  monies  specified  in clause  (ii) above and a copy of the
Officer's  Certificate  specified in clause (iii) above,  the Paying Agent shall
promptly mail to the Holders of Notes so accepted  payment in an amount equal to
the purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. Any Notes not so accepted shall be
promptly  mailed by the  Company to the Holder  thereof.  For  purposes  of this
Section 4.15, the Trustee shall act as the Paying Agent.

     Neither the Board of Directors of the Company nor the Trustee may waive the
provisions of this Section 4.15  relating to the Company's  obligation to make a
Change of Control Offer.

     The  Company  will  comply  with the  requirements  of Rule 14e-1 under the
Exchange Act and any other  securities  laws and  regulations  thereunder to the
extent  such  laws  and  regulations  are  applicable  in  connection  with  the
repurchase of Notes  pursuant to a Change of Control  Offer.  To the extent that
the provisions of any securities laws or regulations  conflict with this Section
4.15,  the  Company  shall  comply  with  the  applicable  securities  laws  and
regulations and shall not be deemed to have breached its obligations  under this
Section 4.15 by virtue thereof.

<page>

                                      -54-

     SECTION 4.16. Limitation on Asset Sales.

     The Company  will not,  and will not cause or permit any of its  Restricted
Subsidiaries to, consummate an Asset Sale unless:

     (1) the Company or the applicable  Restricted  Subsidiary,  as the case may
be, receives  consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise  disposed of (as determined in
good faith by the  Company's  Board of  Directors  or senior  management  of the
Company);

     (2) at least  75% of the  consideration  received  by the  Company  or such
Restricted Subsidiary,  as the case may be, from such Asset Sale shall be in the
form  of  cash  or  Cash  Equivalents  and is  received  at  the  time  of  such
disposition; and

     (3) upon the  consummation  of an Asset Sale,  the Company shall apply,  or
cause such  Restricted  Subsidiary to apply,  the Net Cash Proceeds  relating to
such Asset Sale within 360 days of receipt thereof either:

     (a) to repay or prepay  Indebtedness  outstanding  under the Senior  Credit
Facility  and,  if  that  Indebtedness  is  revolving  credit  Indebtedness,  to
correspondingly  reduce the funding  commitment under the Senior Credit Facility
with respect to the revolving credit Indebtedness repaid or prepaid;

     (b) to repay or prepay any Indebtedness of the Company that is secured by a
Lien permitted to be incurred pursuant to Section 4.18;

     (c) to  make an  investment  in  properties  or  assets  that  replace  the
properties  or assets that were the subject of such Asset Sale or in  properties
or assets that will be used in the  business  of the Company and its  Restricted
Subsidiaries as existing on the Issue Date or in businesses  reasonably  related
thereto ("Replacement Assets");

     (d) to make an investment in Crude Oil and Natural Gas Related Assets;

     (e) to repurchase the Company's 10% Senior Notes due 2007 pursuant to a net
proceeds offer similar to the Net Proceeds Offer described below; or

     (f) to make a combination  of prepayment  and  investment  permitted by the
foregoing clauses (3)(a) through (3)(e).

     On the 361st day after an Asset Sale or such earlier  date,  if any, as the
Board of Directors of the Company  determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in clauses (3)(a) through (3)(f) of the
immediately preceding paragraph (each a "Net Proceeds Offer Trigger Date"), such
aggregate amount of Net Cash Proceeds which have been received by the Company or
such Restricted Subsidiary but which have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (3)(a) through (3)(f) of the
immediately  preceding  paragraph  (each a "Net Proceeds Offer Amount") shall be
applied by the  Company or such

<page>

                                      -55-

     Restricted Subsidiary,  as the case may be, to make an offer to purchase (a
"Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more  than 45 days  following  the  applicable  Net  Proceeds  Offer
Trigger Date,  from all Holders and, to the extent  required by the terms of any
Pari Passu  Indebtedness the holders of such Pari Passu  Indebtedness,  on a pro
rata  basis,  that  principal  amount  of Notes  (and Pari  Passu  Indebtedness)
purchasable  with the Net Proceeds  Offer Amount at a price equal to 100% of the
principal  amount of the Notes (and Pari Passu  Indebtedness)  to be  purchased,
plus  accrued  and unpaid  interest,  if any,  thereon to the date of  purchase;
provided,  however, that if at any time any non-cash  consideration  received by
the Company or any Restricted Subsidiary, as the case may be, in connection with
any Asset  Sale is  converted  into or sold or  otherwise  disposed  of for cash
(other than interest received with respect to any such non-cash  consideration),
then such conversion or disposition  shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds  thereof shall be applied in accordance with
this Section 4.16.

     The Company may defer the Net  Proceeds  Offer until there is an  aggregate
unutilized  Net Proceeds  Offer  Amount  equal to or in excess of $10.0  million
resulting from one or more Asset Sales (at which time, the entire unutilized Net
Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall
be applied as required pursuant to this paragraph).

     Notwithstanding  the first two paragraphs of this Section 4.16, the Company
and its  Restricted  Subsidiaries  will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent that:

     (1) the  consideration for such Asset Sale constitutes  Replacement  Assets
and/or  Crude Oil and  Natural  Gas  Related  Assets  and/or the  assumption  of
obligations  secured by Liens that burden some or all of the assets  being sold;
provided that, in the case of any such assumption,  (a) the Person assuming such
obligations  shall have no  recourse  with  respect to such  obligations  to the
Company or any of its Restricted  Subsidiaries  and (b) no assets of the Company
or any of its Restricted  Subsidiaries  (other than those assets being sold) are
subject to such Liens; and

     (2) such Asset Sale is for fair market value;  provided,  that at least 75%
of the total  consideration  received  by the  Company or any of its  Restricted
Subsidiaries  in  connection  with any such  Asset  Sale shall be in the form of
Replacement Assets,  Crude Oil and Natural Gas Related Assets, the assumption of
Liens described in clause (1) above,  cash or Cash  Equivalents and that any Net
Cash  Proceeds so received  shall be subject to the  provisions of clause (3) of
the first  paragraph  and to the  provisions  of the  second  paragraph  of this
covenant.

     Notice of each Net Proceeds  Offer will be mailed to the record  Holders as
shown on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date,  with a copy to the Trustee,  and shall comply with the procedures
set forth herein.  Upon receiving notice of the Net Proceeds Offer,  Holders may
elect to tender their Notes in whole or in part in integral  multiples of $1,000
in exchange for cash. To the extent Holders properly tender Notes and holders of
Pari Passu  Indebtedness  property  tender such  Indebtedness  with an aggregate
principal  amount  exceeding the Net Proceeds  Offer Amount,  Notes of tendering
Holders and Pari Passu Indebtedness will be purchased on

<page>

                                      -56-

     a pro rata  basis  (based on  principal  amounts  of Notes  and Pari  Passu
Indebtedness  tendered).  A Net Proceeds Offer shall remain open for a period of
20 Business Days or such longer period as may be required by law.

     Each Net Proceeds Offer notice shall contain all instructions and materials
necessary to enable  Holders to tender Notes  pursuant to the Net Proceeds Offer
and shall state the following terms:

     (i) that the Net  Proceeds  Offer is being made  pursuant to Section  4.16,
that all Notes tendered will be accepted for payment; provided, however, that if
the aggregate  principal  amount of Notes  tendered in a Net Proceeds Offer plus
accrued interest (together with the amount of Pari Passu  Indebtedness  properly
tendered) at the  expiration of such offer  exceeds the aggregate  amount of the
Net Proceeds Offer,  the Company shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Company so
that  only  Notes in  denominations  of  $1,000 or  multiples  thereof  shall be
purchased)  and that the Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law;

     (ii) the purchase price (including the amount of accrued  interest) and the
Net Proceeds  Offer  Payment Date (which shall be not less than 30 nor more than
45 days following the applicable Net Proceeds Offer Trigger Date and which shall
be at least five Business Days after the Trustee  receives  notice  thereof from
the Company);

     (iii) that any Note not tendered will continue to accrue interest;

     (iv) that, unless the Company defaults in making payment therefor, any Note
accepted for payment  pursuant to the Net  Proceeds  Offer shall cease to accrue
interest after the Net Proceeds Offer Payment Date;

     (v)  that  Holders  electing  to have a Note  purchased  pursuant  to a Net
Proceeds  Offer will be required to surrender  the Note,  with the form entitled
"Option of Holder to Elect  Purchase" on the reverse of the Note  completed,  to
the Paying  Agent at the address  specified  in the notice prior to the close of
business on the third Business Day prior to the Net Proceeds Offer Payment Date;

     (vi) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than the second Business Day prior to the Net Proceeds
Offer Payment Date, a telegram,  telex, facsimile transmission or letter setting
forth the name of the  Holder,  the  principal  amount  of the Notes the  Holder
delivered  for  purchase  and a statement  that such Holder is  withdrawing  his
election to have such Note purchased; and

     (vii) that Holders  whose Notes are  purchased  only in part will be issued
new Notes in a principal  amount equal to the  unpurchased  portion of the Notes
surrendered;  provided,  however,  that  each Note  purchased  and each new Note
issued shall be in an original  principal amount of $1,000 or integral multiples
thereof.

<page>

                                      -57-

     On or before the Net Proceeds  Offer  Payment  Date,  the Company shall (a)
accept for  payment  Notes or  portions  thereof  tendered  pursuant  to the Net
Proceeds Offer which are to be purchased in accordance with item (i) above,  (b)
deposit with the Paying Agent in accordance  with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all Notes
to be purchased  and (c) deliver an Officers'  Certificate  stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the  Holders  of Notes so  accepted  payment  in an amount  equal to the
purchase price plus accrued interest, if any. For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent.

     The  Company  will  comply  with the  requirements  of Rule 14e-1 under the
Exchange Act and any other  securities  laws and  regulations  thereunder to the
extent  such  laws  and  regulations  are  applicable  in  connection  with  the
repurchase  of Notes  pursuant to a Net Proceeds  Offer.  To the extent that the
provisions  of any  securities  laws or  regulations  conflict with this Section
4.16,  the  Company  shall  comply  with  the  applicable  securities  laws  and
regulations and shall not be deemed to have breached its obligations  under this
Section 4.16 by virtue thereof.

     SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.

     The Company will not cause or permit any of its Restricted  Subsidiaries to
issue  any  Preferred  Stock of any  Restricted  Subsidiary  (other  than to the
Company or to a  Restricted  Subsidiary)  or permit any Person  (other  than the
Company or a Restricted Subsidiary) to own any Preferred Stock of any Restricted
Subsidiary.

     SECTION 4.18. Limitation on Liens.

     Other than  Permitted  Liens,  the Company  will not, and will not cause or
permit any of its Restricted  Subsidiaries  to, directly or indirectly,  create,
incur, assume or permit or suffer to exist any Liens of any kind against or upon
any  property  or assets of the  Company or any of its  Restricted  Subsidiaries
(whether owned on the Issue Date or acquired after the Issue Date) unless:

     (1)  in  the  case  of  Liens  securing   Indebtedness  that  is  expressly
subordinate  or junior in right of  payment to the Notes or any  Guarantee,  the
Notes  or such  Guarantee,  as the case may be,  are  secured  by a Lien on such
property,  assets or proceeds  that is senior in priority to such Liens at least
to the same extent as the Notes are senior in priority to such Indebtedness; and

     (2) in all other  cases,  the  Notes and the  Guarantees  are  equally  and
ratably secured.

     SECTION 4.19. Limitation on Conduct of Business.

     The  Company  will  not,  and  will  not  permit  any  of  its   Restricted
Subsidiaries  to, engage in the conduct of any material  business other than the
Crude Oil and Natural Gas Business.

<page>

                                      -58-

     SECTION 4.20. Additional Subsidiary Guarantees.

     If any of the Company's  Restricted  Subsidiaries  that is not a Subsidiary
Guarantor  is a guarantor of Pari Passu  Indebtedness  or of the  Company's  10%
Senior Notes due 2007, then the Company shall cause such  Restricted  Subsidiary
to  become a  Subsidiary  Guarantor.  If the  Company  or any of its  Restricted
Subsidiaries  transfers or causes to be  transferred,  in one  transaction  or a
series of related  transactions,  any property to any Restricted Subsidiary that
is not a  Subsidiary  Guarantor,  or if  the  Company  or any of its  Restricted
Subsidiaries  shall  organize,  acquire  or  otherwise  invest  in  or  hold  an
Investment in another Restricted Subsidiary,  that caused the total consolidated
assets owned by all Restricted  Subsidiaries that are not Subsidiary  Guarantors
to exceed in the aggregate 2% of the total  consolidated  assets of the Company,
then the  Company  shall  cause one or more of such  transferees  or acquired or
other  Restricted  Subsidiaries  to become  Subsidiary  Guarantors to the extent
necessary  to cause  the  total  consolidated  assets  owned  by all  Restricted
Subsidiaries  that are not Subsidiary  Guarantors not to exceed in the aggregate
2% of the total  consolidated  assets of the  Company.  If  required to become a
Subsidiary Guarantor pursuant to either of the immediately  preceding sentences,
such transferee or acquired or other Restricted Subsidiary shall:

     (1) execute and deliver to the  Trustee a  supplemental  indenture  in form
reasonably  satisfactory  to the  Trustee  pursuant  to  which  such  Restricted
Subsidiary  shall  unconditionally  guarantee all of the  Company's  obligations
under the Notes and the Indenture on the terms set forth in this Indenture; and

     (2)  deliver to the  Trustee an Opinion of Counsel  that such  supplemental
indenture has been duly  authorized,  executed and delivered by such  Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable obligation of
such Restricted  Subsidiary.  Thereafter,  such Restricted Subsidiary shall be a
Subsidiary Guarantor for all purposes of the Indenture.


                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION


     SECTION 5.01. Merger, Consolidation and Sale of Assets.

     The  Company  will  not,  in a single  transaction  or  series  of  related
transactions,  consolidate  or merge with or into any Person,  or sell,  assign,
transfer,  lease,  convey  or  otherwise  dispose  of (or  cause or  permit  any
Restricted  Subsidiary to sell,  assign,  transfer,  lease,  convey or otherwise
dispose of) all or substantially  all of the Company's  assets  (determined on a
consolidated basis for the Company and its Restricted Subsidiaries),  whether as
an entirety or substantially as an entirety to any Person unless:

     (a) either:

     (1) the Company shall be the surviving or continuing corporation; or

<page>

                                      -59-

     (2) the Person (if other than the Company) formed by such  consolidation or
into  which  the  Company  is  merged  or the  Person  which  acquires  by sale,
assignment,  transfer, lease, conveyance or other disposition the properties and
assets  of the  Company  and its  Restricted  Subsidiaries  substantially  as an
entirety (the "Surviving Entity"):

     (x) shall be a corporation organized and validly existing under the laws of
the United States or any state thereof or the District of Columbia; and

     (y)  shall  expressly  assume,  by  supplemental  indenture  (in  form  and
substance  satisfactory to the Trustee),  executed and delivered to the Trustee,
the due and punctual payment of the principal of, premium,  if any, and interest
on all of the Notes and the  performance  of every  covenant of the Notes,  this
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed;

     (b) immediately  after giving effect to such transaction and the assumption
contemplated  by  clause  (a)(2)(y)  above  (including   giving  effect  to  any
Indebtedness  incurred or  anticipated  to be incurred in connection  with or in
respect of such transaction),  the Company or such Surviving Entity, as the case
may be, shall be able to incur at least $1.00 of additional  Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.12 hereof;

     (c) immediately  after giving effect to such transaction and the assumption
contemplated by clause (a)(2)(y) above (including,  without  limitation,  giving
effect to any  Indebtedness  incurred or anticipated to be incurred and any Lien
granted in  connection  with or in respect  of the  transaction),  no Default or
Event of Default shall have occurred or be continuing; and

     (d) the Company or the  Surviving  Entity,  as the case may be,  shall have
delivered  to the Trustee an  Officers'  Certificate  and an Opinion of Counsel,
each stating that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental  indenture is required in
connection with such transaction,  such supplemental indenture complies with the
applicable  provisions of this  Indenture and that all  conditions  precedent in
this  Indenture  relating to such  transaction  have been  satisfied;  provided,
however,  that such counsel may rely, as to matters of fact, on a certificate or
certificates of officers of the Company.

     For purposes of the foregoing, the transfer (by lease, assignment,  sale or
otherwise,  in a  single  transaction  or  series  of  transactions)  of  all or
substantially  all of the  properties  or  assets  of  one  or  more  Restricted
Subsidiaries the Capital Stock of which  constitutes all or substantially all of
the properties and assets of the Company,  shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

     Each  Subsidiary  Guarantor  (other  than any  Subsidiary  Guarantor  whose
Guarantee is to be released in  accordance  with the terms of the  Guarantee and
this Indenture in connection with any transaction  complying with the provisions
of the  Indenture  described  under Article 5 will not, and the Company will not
cause or permit any Subsidiary  Guarantor to,  consolidate with or merge with or
into any Person other than the Company or another Subsidiary Guarantor that is a
Restricted Subsidiary unless:

<page>

                                      -60-

     (1) the entity formed by or surviving any such  consolidation or merger (if
other than the Subsidiary Guarantor) or to which such sale, lease, conveyance or
other  disposition  shall have been made is a corporation  or other legal entity
organized and existing  under the laws of the United States or any state thereof
or the District of Columbia;

     (2) such entity assumes by execution of a supplemental indenture all of the
obligations of the Subsidiary Guarantor under its Guarantee;

     (3)  immediately  after giving  effect to such  transaction,  no Default or
Event of Default shall have occurred and be continuing; and

     (4) immediately  after giving effect to such transaction and the use of any
net  proceeds  therefrom  on a pro forma basis,  the Company  could  satisfy the
provisions of clause (b) of the first paragraph of this Section 5.01.

     Any merger or  consolidation  of a Subsidiary  Guarantor  with and into the
Company  (with the Company  being the  surviving  entity) or another  Subsidiary
Guarantor  that is a Restricted  Subsidiary  need only comply with clause (d) of
the first paragraph of this Section 5.01.

     SECTION 5.02. Successor Corporation Substituted.

     Upon any  consolidation,  combination  or merger or any  transfer of all or
substantially  all of the assets of the Company in accordance with Section 5.01,
in which the Company is not the  continuing  corporation,  the successor  Person
formed by such  consolidation  or into  which the  Company is merged or to which
such conveyance,  lease or transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
and the Notes with the same effect as if such surviving entity had been named as
such.

                                   ARTICLE SIX

                                    REMEDIES


     SECTION 6.01. Events of Default.

     An "Event of Default" means any of the following events:

     (a) the failure to pay interest (including any Additional  Interest) on any
Notes when the same  becomes due and payable and such  default  continues  for a
period of 30 days;

     (b) the  failure  to pay the  principal  of any Notes  when such  principal
becomes due and payable,  at maturity,  upon redemption or otherwise  (including
the failure to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer);

<page>

                                      -61-

     (c) a default in the  observance or  performance  of any other  covenant or
agreement contained in this Indenture which default continues for a period of 30
days after the Company  receives  written  notice  specifying  the default  (and
demanding  that such default be remedied)  from the Trustee or the Holders of at
least 25% of the outstanding  principal  amount of the Notes (except in the case
of a default with respect to  observance or  performance  of any of the terms or
provisions  of Section  4.15,  4.16 or 5.01 which  will  constitute  an Event of
Default  with  such  notice   requirement  but  without  such  passage  of  time
requirement);

     (d) a default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any  Indebtedness of
the Company or any Restricted  Subsidiary (or the payment of which is guaranteed
by the Company or any  Restricted  Subsidiary),  whether such  Indebtedness  now
exists,  or is created  after the Issue Date,  which  default (i) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
after any applicable  grace period provided in such  Indebtedness on the date of
such default (a "Payment  Default") or (ii) results in the  acceleration of such
Indebtedness  prior to its express  maturity  and, in each case,  the  principal
amount of any such Indebtedness, together with the principal amount of any other
such  Indebtedness  under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $10.0 million or more;

     (e) one or more judgments in an aggregate amount in excess of $10.0 million
(unless covered by insurance by a reputable  insurer as to which the insurer has
not disclaimed  coverage) shall have been rendered against the Company or any of
its Restricted  Subsidiaries and such judgments remain undischarged,  unpaid and
unstayed for a period of 60 days after such  judgment or judgments  become final
and non-appealable;

     (f) the Company or any of its Significant Subsidiaries pursuant to or under
or within the meaning of any Bankruptcy Law:

     (i) commences a voluntary case or proceeding;

     (ii)  consents  to the  entry  of an  order  for  relief  against  it in an
involuntary case or proceeding;

     (iii)  consents  to the  appointment  of a  Custodian  of it or for  all or
substantially all of its property;

     (iv) makes a general assignment for the benefit of its creditors; or

     (v) shall  generally  not pay its debts when such debts become due or shall
admit in writing its inability to pay its debts generally;

     (g) a court of competent  jurisdiction  enters an order or decree under any
Bankruptcy Law that:

<page>

                                      -62-

     (i) is for relief against the Company or any Significant  Subsidiary of the
Company in an involuntary case or proceeding;

     (ii) appoints a Custodian of the Company or any  Significant  Subsidiary of
the Company for all or substantially all of its Properties; or

     (iii) orders the liquidation of the Company or any  Significant  Subsidiary
of the Company;

     and in each case the order or decree remains  unstayed and in effect for 60
days; or

     (h) any of the  Guarantees  cease to be in full  force and effect or any of
the Guarantees are declared to be null and void or invalid and  unenforceable or
any of the Subsidiary  Guarantors  denies or disaffirms its liability  under its
Guarantees  (other  than by reason  of  release  of a  Subsidiary  Guarantor  in
accordance with the terms of this Indenture).

     SECTION 6.02. Acceleration.

     Upon the happening of an Event of Default  specified in Section 6.01 (other
than an Event  of  Default  specified  in  clauses  (f) or (g) of  Section  6.01
relating  to the  Company)  the  Trustee  may, or the holders of at least 25% in
principal amount of outstanding Notes may, declare the principal of, premium, if
any,  and accrued and unpaid  interest on all the Notes to be due and payable by
notice in writing to the Company and the Trustee specifying the respective Event
of Default and that it is a "notice of  acceleration"  and the same shall become
immediately  due and  payable.  If an Event of Default of the type  described in
clauses (f) or (g) above relating to the Company occurs and is continuing,  then
all unpaid principal of, and premium, if any, and accrued and unpaid interest on
all of the outstanding  Notes shall ipso facto become and be immediately due and
payable  without any  declaration or other act on the part of the Trustee or any
Holder.

     At any time after a declaration of  acceleration  with respect to the Notes
as described in the preceding paragraph,  the Holders of a majority in aggregate
principal  amount of the Notes then outstanding by written notice to the Company
and the Trustee may rescind and cancel such declaration and its consequences (a)
if the  rescission  would not conflict  with any judgment or decree,  (b) if all
existing  Events of  Default  have been  cured or waived  except  nonpayment  of
principal or interest that has become due solely  because of such  acceleration,
(c) to the extent the payment of such  interest  is lawful,  interest on overdue
installments of interest and overdue  principal,  which has become due otherwise
than by such declaration of acceleration,  has been paid, (d) if the Company has
paid the Trustee its reasonable  compensation and reimbursed the Trustee for its
expenses,  disbursements and advances and (e) in the event of the cure or waiver
of an Event  of  Default  of the type  described  in  clauses  (f) or (g) of the
description  of Events of Default  above,  the  Trustee  shall have  received an
Officers'  Certificate  and an Opinion of Counsel that such Event of Default has
been cured or waived;  provided,  however,  that such  counsel  may rely,  as to
matters of fact, on a certificate or certificates of officers of the Company. No
such  rescission  shall  affect  any  subsequent  Default  or  impair  any right
consequent thereto.

<page>

                                      -63-

     SECTION 6.03. Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of the
principal  of,  premium,  if any,  or  interest  on the Notes or to enforce  the
performance of any provision of the Notes or this Indenture.

     All rights of action and claims  under this  Indenture  or the Notes may be
enforced by the Trustee even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or  acquiescence in the
Event of Default.  No remedy is exclusive  of any other  remedy.  All  available
remedies are cumulative to the extent permitted by law.

     SECTION 6.04. Waiver of Past Defaults.

     At any time prior to the  declaration  of  acceleration  of the Notes,  the
Holders of not less than a majority in aggregate  principal  amount of the Notes
then  outstanding  by notice to the Trustee may, on behalf of the Holders of all
the Notes,  waive any existing  Default or Event of Default and its consequences
under this Indenture,  except a Default or Event of Default specified in Section
6.01(a) or (b) or in respect of any provision hereof which cannot be modified or
amended without the consent of the Holder so affected  pursuant to Section 9.02.
When a Default or Event of Default  is so waived,  it shall be deemed  cured and
shall cease to exist. This Section 6.04 shall be in lieu of ss.  316(a)(1)(B) of
the TIA and such ss.  316(a)(1)(B) of the TIA is hereby expressly  excluded from
this Indenture and the Notes, as permitted by the TIA.

     SECTION 6.05. Control by Majority.

     Holders of the Notes may not enforce this  Indenture or the Notes except as
provided in this  Article Six and under the TIA.  The Holders of not less than a
majority in aggregate  principal amount of the outstanding  Notes shall have the
right to direct the time,  method and place of conducting any proceeding for any
remedy  available to the Trustee,  or exercising any trust or power conferred on
the  Trustee,  provided,  however,  that the  Trustee  may  refuse to follow any
direction (a) that  conflicts with any rule of law or this  Indenture,  (b) that
the  Trustee  determines  may be unduly  prejudicial  to the  rights of  another
Holder,  or (c) that may expose  the  Trustee to  personal  liability  for which
reasonable  indemnity  provided to the Trustee  against such liability  shall be
deemed inadequate by the Trustee;  provided,  further, however, that the Trustee
may take any other action deemed proper by the Trustee that is not  inconsistent
with such direction or this Indenture. This Section 6.05 shall be in lieu of ss.
316(a)(1)(A)  of the  TIA,  and  such  ss.  316(a)(1)(A)  of the  TIA is  hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.

     SECTION 6.06. Limitation on Suits.

     No Holder of any Notes  shall have any right to  institute  any  proceeding
with respect to this Indenture or the Notes or any remedy hereunder,  unless the
Holders of at least 25% in aggregate  principal amount of the outstanding  Notes
have made written request, and offered indemnity,

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                                      -64-

     satisfactory  to the Trustee to institute such  proceeding as Trustee under
the  Notes  and this  Indenture,  the  Trustee  has  failed  to  institute  such
proceeding  within 30 days after  receipt of such  notice,  request and offer of
indemnity  and  the  Trustee,  within  such  30-day  period,  has  not  received
directions  inconsistent with such written request by Holders of not less than a
majority in aggregate principal amount of the outstanding Notes.

     The foregoing  limitations shall not apply to a suit instituted by a Holder
of a Note for the  enforcement of the payment of the principal of,  premium,  if
any, or interest on, such Note on or after the respective due dates expressed or
provided for in such Note.

     A Holder may not use this  Indenture to  prejudice  the rights of any other
Holders or to obtain priority or preference over such other Holders.

     SECTION 6.07. Right of Holders To Receive Payment.

     Notwithstanding  any other  provision in this  Indenture,  the right of any
Holder of a Note to receive  payment of the principal of,  premium,  if any, and
interest  on such  Note,  on or after  the  respective  due dates  expressed  or
provided  for in such  Note,  or to bring suit for the  enforcement  of any such
payment on or after the respective due dates, is absolute and  unconditional and
shall not be impaired or affected without the consent of the Holder.

     SECTION 6.08. Collection Suit by Trustee.

     If an Event of  Default  specified  in clause  (a) or (b) of  Section  6.01
occurs and is continuing,  the Trustee may recover  judgment in its own name and
as trustee of an express trust against the Company,  or any other obligor on the
Notes for the whole amount of the  principal  of,  premium,  if any, and accrued
interest  remaining unpaid,  together with interest on overdue principal and, to
the  extent  that  payment  of such  interest  is  lawful,  interest  on overdue
installments of interest, in each case at the rate per annum provided for by the
Notes  and such  further  amount as shall be  sufficient  to cover the costs and
expenses  of  collection,  including  the  reasonable  compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel.

     SECTION 6.09. Trustee May File Proofs of Claim.

     The Trustee may file such proofs of claim and other  papers or documents as
may be  necessary  or  advisable  in  order to have the  claims  of the  Trustee
(including any claim for the reasonable  compensation,  expenses,  disbursements
and advances of the Trustee, its agents,  counsel,  accountants and experts) and
the  Holders  allowed in any  judicial  proceedings  relative  to the Company or
Restricted  Subsidiaries (or any other obligor upon the Notes),  their creditors
or their property and shall be entitled and empowered to collect and receive any
monies or other  property  payable  or  deliverable  on any such  claims  and to
distribute  the same,  and any  Custodian in any such  judicial  proceedings  is
hereby  authorized  by each Holder to make such  payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the  Holders,  to pay to the Trustee any amount due to it for the  reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel,  and any other  amounts due the Trustee  under  Section  7.07.

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                                      -65-

     Nothing  herein  contained  shall be deemed to  authorize  the  Trustee  to
authorize  or  consent to or accept or adopt on behalf of any Holder any plan of
reorganization,  arrangement,  adjustment or composition  affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.

     SECTION 6.10. Priorities.

     If the Trustee collects any money pursuant to this Article Six it shall pay
out such money in the following order:

     First: to the Trustee for amounts due under Section 7.07;

     Second:  to Holders for  interest  accrued on the Notes,  ratably,  without
preference or priority of any kind,  according to the amounts due and payable on
the Notes for interest;

     Third: to Holders for the principal  amounts  (including any premium) owing
under the Notes, ratably,  without preference or priority of any kind, according
to the  amounts due and payable on the Notes for the  principal  (including  any
premium); and

     Fourth: the balance, if any, to the Company.

     The Trustee,  upon prior  written  notice to the Company,  may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.

     SECTION 6.11. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture
or in any suit  against  the  Trustee  for any action  taken or omitted by it as
Trustee,  a court may in its discretion require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs,  including  reasonable  attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses  made by the party  litigant.  This Section 6.11
does not  apply to any suit by the  Trustee,  any suit by a Holder  pursuant  to
Section  6.07,  or a suit by a Holder or Holders  of more than 10% in  aggregate
principal amount of the outstanding Notes.

     SECTION 6.12. Restoration of Rights and Remedies.

     If the Trustee or any Holder has  instituted  any proceeding to enforce any
right or remedy under this  Indenture or any Note and such  proceeding  has been
discontinued or abandoned for any reason,  or has been  determined  adversely to
the  Trustee or to such  Holder,  then and in every such case the  Company,  the
Trustee and the Holders shall,  subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder,  and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

<page>

                                      -66-

                                  ARTICLE SEVEN

                                     TRUSTEE


     SECTION 7.01. Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing,  the Trustee may
exercise such of the rights and powers vested in it by this  Indenture and shall
use the same  degree  of care and  skill in its  exercise  thereof  as a prudent
person would exercise or use under the  circumstances  in the conduct of his own
affairs.

     (b) Except during the continuance of an Event of Default:

     (1) The Trustee  need perform  only those  duties as are  specifically  set
forth in this Indenture and no covenants or obligations shall be implied in this
Indenture that are adverse to the Trustee.

     (2) In the absence of bad faith on its part,  the Trustee may  conclusively
rely,  as to the truth of the  statements  and the  correctness  of the opinions
expressed  therein,  upon certificates or opinions  furnished to the Trustee and
conforming to the  requirements of this Indenture.  However,  in the case of any
such  certificates  or opinions  that by any provision  hereof are  specifically
required  to be  furnished  to  the  Trustee,  the  Trustee  shall  examine  the
certificates  and  opinions  to  determine  whether  or not they  conform to the
requirements of this Indenture.

     (c) Notwithstanding  anything to the contrary herein contained, the Trustee
may  not be  relieved  from  liability  for its own  negligent  action,  its own
negligent failure to act, or its own willful misconduct, except that:

     (1) This  paragraph  does not limit the  effect  of  paragraph  (b) of this
Section 7.01.

     (2) The Trustee  shall not be liable for any error of judgment made in good
faith by a Trust  Officer,  unless it is  conclusively  determined by a court of
competent  jurisdiction  that the  Trustee was  negligent  in  ascertaining  the
pertinent facts.

     (3) The Trustee  shall not be liable with respect to any action it takes or
omits to take in good  faith  in  accordance  with a  direction  received  by it
pursuant to Section 6.02, 6.04 or 6.05.

     (d) No provision of this  Indenture  shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have  reasonable  grounds for believing that repayment of such funds
or adequate  indemnity against such risk or liability is not reasonably  assured
to it.

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                                      -67-

     (e)  Every  provision  of this  Indenture  that in any way  relates  to the
Trustee is subject to paragraphs  (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.

     (f) The  Trustee  shall not be liable for  interest  on any money or assets
received  by it except as the  Trustee  may agree in writing  with the  Company.
Assets held in trust by the Trustee  need not be  segregated  from other  assets
except to the extent required by law.

     SECTION 7.02. Rights of Trustee.

     Subject to Section 7.01:

     (a) The  Trustee  may  conclusively  rely and shall be fully  protected  in
acting or refraining from acting upon any document  believed by it to be genuine
and to have been  signed or  presented  by the  proper  Person or  Persons.  The
Trustee need not investigate any fact or matter stated in the document.

     (b) Before the Trustee acts or refrains  from  acting,  it may consult with
counsel of its selection and may require an Officers'  Certificate or an Opinion
of Counsel,  which shall conform to Sections 11.04 and 11.05.  The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such advice or such Officers' Certificate or Opinion of Counsel.

     (c) The Trustee may act through attorneys,  agents,  custodians or nominees
and shall not be  responsible  for the misconduct or negligence of any attorney,
agent, custodian or nominee appointed with due care.

     (d) The  Trustee  shall not be liable for any action that it takes or omits
to take in good faith which it  reasonably  believes to be  authorized or within
its rights or powers conferred upon it by this Indenture.

     (e) The Trustee shall not be bound to make any investigation into the facts
or  matters  stated  in  any  resolution,  certificate,  statement,  instrument,
opinion, notice, request,  direction,  consent, order, bond, debenture, or other
paper or document,  but the Trustee,  in its  discretion,  may make such further
inquiry or  investigation  into such facts or matters as it may see fit, and, if
the Trustee shall  determine to make such further inquiry or  investigation,  it
shall be entitled,  upon reasonable notice to the Company, to examine the books,
records, and premises of the Company,  personally or by agent or attorney and to
consult with the  officers and  representatives  of the Company,  including  the
Company's accountants and attorneys.

     (f) The Trustee  shall be under no obligation to exercise any of the rights
or powers vested in it by this  Indenture at the request,  order or direction of
any of the Holders  pursuant to the  provisions of this  Indenture,  unless such
Holders shall have offered to the Trustee security or indemnity  satisfactory to
the Trustee against the costs, expenses and liabilities which may be incurred by
it in compliance with such request, order or direction.

<page>

                                      -68-

     (g) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.

     (h) Delivery of reports,  information  and  documents to the Trustee  under
Section 4.08 is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute  constructive notice of any information contained
therein or  determinable  from  information  contained  therein,  including  the
Company's  compliance  with any of their  covenants  hereunder  (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).

     SECTION 7.03. Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or
pledgee  of  Notes  and may  otherwise  deal  with  the  Company,  any of  their
Subsidiaries,  or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.

     SECTION 7.04. Trustee's Disclaimer.

     The Trustee makes no  representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the Notes,  and it shall not be responsible  for any statement
of the  Company  in  this  Indenture  or the  Notes  other  than  the  Trustee's
certificate of authentication.

     SECTION 7.05. Notice of Default.

     If a Default or an Event of Default  occurs and is continuing  and if it is
actually known to a Trust Officer,  the Trustee shall mail to each Holder notice
of the  uncured  Default  or Event of  Default  within 90 days  after  obtaining
knowledge  thereof.  Except in the case of a Default  or an Event of  Default in
payment of  principal  of, or interest on, any Note,  including  an  accelerated
payment,  a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Net Proceeds  Offer Payment Date pursuant to
a Net Proceeds Offer and a Default in compliance  with Article Five hereof,  the
Trustee may  withhold the notice if and so long as its Board of  Directors,  the
executive  committee of its Board of  Directors or a committee of its  directors
and/or Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders.  The foregoing  sentence of this Section 7.05 shall
be in lieu of the  proviso  to ss.  315(b)  of the TIA and such  proviso  to ss.
315(b) of the TIA is hereby  expressly  excluded  from  this  Indenture  and the
Notes, as permitted by the TIA.

     SECTION 7.06. Reports by Trustee to Holders.

     Within 60 days after November 1 of each year beginning with 2002 and for so
long as Notes remain  outstanding,  the Trustee shall, to the extent that any of
the events  described in TIA ss.  313(a)  occurred  within the  previous  twelve
months,  but not otherwise,  mail to each Holder a brief report dated as of such
date that complies with TIA ss.  313(a).  The Trustee also shall comply with TIA
ss.ss. 313(b), (c) and (d).

<page>

                                      -69-

     A copy of each report at the time of its mailing to Holders shall be mailed
to the Company and filed with the Commission and each stock exchange, if any, on
which the Notes are listed.

     The Company shall promptly notify the Trustee if the Notes become listed on
any stock exchange and the Trustee shall comply with TIA ss. 313(d).

     SECTION 7.07. Compensation and Indemnity.

     The Company  shall pay to the Trustee  from time to time such  compensation
for its services as has been agreed to in writing  signed by the Company and the
Trustee.  The  Trustee's  compensation  shall  not  be  limited  by  any  law on
compensation  of a trustee of an express trust.  The Company shall reimburse the
Trustee upon request for all reasonable  out-of-pocket expenses incurred or made
by it in connection  with the  performance  of its duties under this  Indenture.
Such expenses  shall include the  reasonable  fees and expenses of the Trustee's
agents, counsel, accountants and experts.

     The  Company  shall  indemnify  each of the  Trustee  (or  any  predecessor
Trustee) and its agents, employees,  stockholders,  Affiliates and directors and
officers for, and hold them each harmless against, any and all loss,  liability,
damage,  claim or expense  (including  reasonable fees and expenses of counsel),
including  taxes (other than taxes based on the income of the Trustee)  incurred
by them  except for such  actions to the extent  caused by any  negligence,  bad
faith or willful  misconduct on their part, arising out of or in connection with
the  acceptance or  administration  of this  Indenture  including the reasonable
costs and  expenses of  defending  themselves  against any claim or liability in
connection  with the exercise or performance  of any of their rights,  powers or
duties  hereunder.  The Trustee  shall notify the Company  promptly of any claim
asserted  against the Trustee for which it may seek indemnity.  At the Trustee's
sole  discretion,  the  Company  shall  defend the claim and the  Trustee  shall
cooperate  and may  participate  in the  defense;  provided,  however,  that any
settlement  of a claim  shall be  approved  in  writing  by the  Trustee if such
settlement  would  result in an admission of liability by the Trustee or if such
settlement  would not be  accompanied  by a full  release of the Trustee for all
liability  arising out of the events  giving rise to such claim.  Alternatively,
the Trustee may at its option have separate  counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel.

     To secure the  Company's  payment  obligations  in this Section  7.07,  the
Trustee  shall  have a Lien  prior to the Notes on all  assets or money  held or
collected by the Trustee,  in its  capacity as Trustee,  except  assets or money
held in trust to pay principal of or premium,  if any, or interest on particular
Notes.

     When the  Trustee  incurs  expenses or renders  services  after an Event of
Default  specified  in Section  6.01(f) or (g)  occurs,  such  expenses  and the
compensation   for  such  services  are  intended  to  constitute   expenses  of
administration under any Bankruptcy Law.

     The  provisions of this Section 7.07 shall survive the  termination of this
Indenture or the earlier resignation or removal of the Trustee.

<page>

                                      -70-

     SECTION 7.08. Replacement of Trustee.

     The Trustee may resign at any time by so notifying the Company. The Holders
of a  majority  in  principal  amount of the  outstanding  Notes may  remove the
Trustee  and appoint a  successor  Trustee  with the  Company's  consent,  by so
notifying the Company and the Trustee. The Company may remove the Trustee if:

     (1) the Trustee fails to comply with Section 7.10;

     (2) the Trustee is adjudged bankrupt or insolvent;

     (3) a receiver or other public  officer  takes charge of the Trustee or its
property; or

     (4) the Trustee becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of Trustee for any reason,  the Company  shall  notify each Holder of such event
and shall  promptly  appoint a  successor  Trustee.  Within  one year  after the
successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the outstanding  Notes may appoint a successor  Trustee to replace the
successor Trustee appointed by the Company.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee  shall  transfer  all  property  held by it as Trustee to the  successor
Trustee,  subject to the lien  provided  in Section  7.07,  the  resignation  or
removal of the  retiring  Trustee  shall  become  effective,  and the  successor
Trustee  shall have all the rights,  powers and duties of the Trustee under this
Indenture. The Company shall mail notice of such successor Trustee's appointment
to each Holder.

     If a  successor  Trustee  does not take  office  within  45 days  after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate  principal amount of the outstanding  Notes
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor Trustee.

     If the Trustee fails to comply with Section  7.10,  any Holder may petition
any court of  competent  jurisdiction  for the  removal of the  Trustee  and the
appointment of a successor Trustee.

     Notwithstanding  any resignation or replacement of the Trustee  pursuant to
this Section 7.08, the Company's  obligations  under Section 7.07 shall continue
for the benefit of the retiring Trustee.

     SECTION 7.09. Successor Trustee by Merger, Etc.

     If the Trustee consolidates with, merges or converts into, or transfers all
or  substantially  all of its corporate trust business to, another  corporation,
the  resulting,  surviving  or  transferee  corporation  without any further act
shall,  if such  resulting,  surviving or  transferee  corporation  is

<page>

                                      -71-

     otherwise eligible hereunder, be the successor Trustee; provided,  however,
that such  corporation  shall be otherwise  qualified  and  eligible  under this
Article Seven.

     SECTION 7.10. Eligibility; Disqualification.

     This Indenture shall always have a Trustee who satisfies the requirement of
TIA ss.ss.  310(a)(1),  (2) and (5).  The Trustee  (or, in the case of a Trustee
that is a corporation  included in a bank holding  company  system,  the related
bank holding company) shall have a combined capital and surplus of at least $150
million as set forth in its most recent  published  annual  report of condition,
and have a Corporate  Trust Office in the City of New York. In addition,  if the
Trustee is a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company,  shall meet the capital requirements
of TIA ss.  310(a)(2).  The Trustee shall comply with TIA ss. 310(b);  provided,
however,  that there shall be excluded from the  operation of TIA ss.  310(b)(1)
any indenture or indentures  under which other  securities,  or  certificates of
interest or participation in other  securities,  of the Company are outstanding,
if the  requirements  for such exclusion set forth in TIA ss. 310(b)(1) are met.
The  provisions  of TIA ss. 310 shall  apply to the  Company,  as obligor of the
Notes.

     SECTION 7.11. Preferential Collection of Claims Against the Company.

     The  Trustee  shall  comply with TIA ss.  311(a),  excluding  any  creditor
relationship  listed in TIA ss.  311(b).  A  Trustee  who has  resigned  or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.  The
provisions of TIA ss. 311 shall apply to the Company, as obligor on the Notes.

     SECTION 7.12. Force Majeure.

     In no event  shall the  Trustee be liable  for any  failure or delay in the
performance of its obligations  hereunder  because of  circumstances  beyond the
Trustee's  control,  including,  but not  limited to,  acts of God,  flood,  war
(whether declared or undeclared),  terrorism,  fire, riot,  embargo,  government
action, including any laws, ordinances, regulations,  governmental action or the
like  which  delay,   restrict  or  prohibit  the   providing  of  the  services
contemplated by this Indenture.

                                  ARTICLE EIGHT

                       DISCHARGE OF INDENTURE; DEFEASANCE


     SECTION 8.01. Termination of Company's Obligations.

     This  Indenture  will be discharged  and will cease to be of further effect
(except as to surviving  rights of  registration  of transfer or exchange of the
Notes, as expressly  provided for in this Indenture) as to all outstanding Notes
when (a) either  (i) all the  Notes,  theretofore  authenticated  and  delivered
(except  lost,  stolen or destroyed  Notes which have been  replaced or paid and
Notes for  whose  payment  money  has  theretofore  been  deposited  in trust or
segregated and held in trust by the

<page>

                                      -72-

     Company and thereafter repaid to the Company or discharged from such trust)
have  been  delivered  to the  Trustee  for  cancellation  or (ii) all Notes not
theretofore  delivered  to the  Trustee  for  cancellation  have  become due and
payable and the Company has irrevocably deposited or caused to be deposited with
the  Trustee  funds in an amount  sufficient  to pay and  discharge  the  entire
Indebtedness  on  the  Notes  not  theretofore  delivered  to  the  Trustee  for
cancellation,  for principal of,  premium,  if any, and interest on the Notes to
the date of deposit  together  with  irrevocable  instructions  from the Company
directing the Trustee to apply such funds to the payment  thereof at maturity or
redemption,  as the case may be; (b) the Company has paid all other sums payable
under this  Indenture by the Company;  and (c) the Company has  delivered to the
Trustee an  Officers'  Certificate  and an Opinion of Counsel  stating  that all
conditions  precedent  under this  Indenture  relating to the  satisfaction  and
discharge of this  Indenture have been complied with;  provided,  however,  that
such counsel may rely, as to matters of fact, on a certificate  or  certificates
of officers of the Company.

     The  Company  may,  at its  option  and at any  time,  elect  to  have  its
obligations  and the  corresponding  obligations  of the  Subsidiary  Guarantors
discharged  with respect to the  outstanding  Notes ("Legal  Defeasance").  Such
Legal  Defeasance  means  that the  Company  shall be  deemed  to have  paid and
discharged the entire  indebtedness  represented by the outstanding  Notes,  and
satisfied all of its obligations with respect to the Notes,  except for: (1) the
rights of Holders to receive  payments in respect of the principal of,  premium,
if any, and interest on the Notes when such  payments are due, (2) the Company's
obligations  with  respect  to the Notes  concerning  issuing  temporary  Notes,
registration  of  Notes,  mutilated,  destroyed,  lost or  stolen  Notes and the
maintenance of an office or agency for payments,  (3) the rights, powers, trust,
duties and immunities of the Trustee and the Company's obligations in connection
therewith  and (4) the Legal  Defeasance  provisions  of this Section  8.01.  In
addition,  the  Company  may,  at its option and at any time,  elect to have the
obligations of the Company and the Subsidiary Guarantors,  if any, released with
respect to covenants  contained in Sections  4.04,  4.05,  4.08 and 4.10 through
4.20 and Article Five  ("Covenant  Defeasance")  and  thereafter any omission to
comply with such obligations  shall not constitute a Default or Event of Default
with  respect to the Notes.  In the event of Covenant  Defeasance,  those events
described  under  Section  6.01  (except  those  events   described  in  Section
6.01(a),(b),(f)  and (g)) will no longer  constitute  an Event of  Default  with
respect to the Notes.

     In order to exercise either Legal Defeasance or Covenant Defeasance:

     (1) the Company must  irrevocably  deposit with the Trustee,  in trust, for
the benefit of the Holders  cash in United  States  dollars,  non-callable  U.S.
Government  Obligations,  or a combination  thereof,  in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the Notes
on the stated date for payment thereof or on the applicable  Redemption Date, as
the case may be;

     (2) in the case of Legal  Defeasance,  the Company shall have  delivered to
the Trustee an Opinion of Counsel in the United States reasonably  acceptable to
the Trustee confirming that (a) the Company has received from, or there has been
published  by, the  Internal  Revenue  Service a ruling or (b) since the date of
this  Indenture,  there has been a change in the  applicable  federal income tax
law,  in either  case to the effect  that,  and based  thereon  such  Opinion of

<page>

                                      -73-

     Counsel shall confirm that, the Holders will not recognize income,  gain or
loss for federal  income tax purposes as a result of such Legal  Defeasance  and
will be subject to federal  income tax on the same  amounts,  in the same manner
and at the same times as would have been the case if such Legal  Defeasance  had
not occurred;

     (3) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably  acceptable to
the Trustee confirming that the Holders will not recognize income,  gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and will
be subject to federal income tax on the same amounts,  in the same manner and at
the same times as would have been the case if such Covenant  Defeasance  had not
occurred;

     (4) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as Events of Default under  Section  6.01(f)
or (g) from  bankruptcy or insolvency  events are concerned,  at any time in the
period ending on the 91st day after the date of deposit;

     (5) such Legal  Defeasance  or  Covenant  Defeasance  shall not result in a
breach or  violation  of, or  constitute a default  under this  Indenture or any
other  agreement  or  instrument  to which the Company or any of its  Restricted
Subsidiaries  is a  party  or by  which  the  Company  or any of its  Restricted
Subsidiaries is bound;

     (6)  the  Company  shall  have   delivered  to  the  Trustee  an  Officers'
Certificate stating that the deposit was not made by the Company with the intent
of  preferring  the Holders over any other  creditors of the Company or with the
intent of defeating,  hindering,  delaying or defrauding any other  creditors of
the Company or others;

     (7)  the  Company  shall  have   delivered  to  the  Trustee  an  Officers'
Certificate  and an  Opinion  of  Counsel,  each  stating  that  all  conditions
precedent  provided  for or relating  to the Legal  Defeasance  or the  Covenant
Defeasance, as the case may be, have been complied with; provided, however, that
such counsel may rely, as to matters of fact, on a certificate  or  certificates
of officers of the Company; and

     (8) the Company  shall have  delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day  following  the  deposit,  the trust funds
will not be  subject  to the effect of any  applicable  bankruptcy,  insolvency,
reorganization or similar laws affecting creditors' rights generally;  provided,
however,  that such counsel may rely, as to matters of fact, on a certificate or
certificates of officers of the Company.

     SECTION 8.02. Application of Trust Money.

     The Trustee or Paying  Agent shall hold in trust U.S.  Legal Tender or U.S.
Government  Obligations  deposited  with it pursuant to Section 8.01,  and shall
apply  the  deposited  U.S.  Legal  Tender  and the money  from U.S.  Government
Obligations in accordance with this Indenture to the payment of the principal of
and interest on the Notes.  The Trustee  shall be under no  obligation to

<page>

                                      -74-

     invest said U.S. Legal Tender or U.S.  Government  Obligations except as it
may agree in writing with the Company.

     The Company  shall pay and  indemnify  the Trustee  against any tax, fee or
other charge imposed on or assessed against the Legal Tender or U.S.  Government
Obligations  deposited  pursuant to Section 8.01 or the  principal  and interest
received in respect  thereof  other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Notes.

     SECTION 8.03. Repayment to the Company.

     Subject to Section  8.01,  the Trustee and the Paying Agent shall  promptly
pay to the Company upon request any excess U.S. Legal Tender or U.S.  Government
Obligations  held by them at any time and  thereupon  shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Company  upon request any money held by them for the payment of principal
or interest that remains  unclaimed for one year;  provided,  however,  that the
Trustee or such Paying Agent, before being required to make any payment,  may at
the expense of the Company cause to be published  once in a newspaper of general
circulation  in the City of New  York or mail to each  Holder  entitled  to such
money notice that such money remains  unclaimed and that after a date  specified
therein  which  shall be at least 30 days from the date of such  publication  or
mailing any unclaimed balance of such money then remaining will be repaid to the
Company. After payment to the Company,  Holders entitled to such money must look
to the  Company  for  payment  as general  creditors  unless an  applicable  law
designates another Person.

     SECTION 8.04. Reinstatement.

     If the Trustee or Paying Agent is unable to apply any U.S.  Legal Tender or
U.S.  Government  Obligations  in accordance  with Section 8.01 by reason of any
legal  proceeding  or by  reason  of any  order  or  judgment  of any  court  or
governmental  authority  enjoining,  restraining or otherwise  prohibiting  such
application,  the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred  pursuant to Section
8.01 until such time as the Trustee or Paying  Agent is  permitted  to apply all
such U.S. Legal Tender or U.S. Government Obligations in accordance with Section
8.01; provided, however, that if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of their obligations, the
Company  shall be  subrogated  to the  rights of the  Holders  of such  Notes to
receive such payment from the U.S. Legal Tender or U.S.  Government  Obligations
held by the Trustee or Paying Agent.

     SECTION 8.05. Acknowledgment of Discharge by Trustee.

     After (i) the  conditions  of Section  8.01 have been  satisfied,  (ii) the
Company has paid or caused to be paid all other sums  payable  hereunder  by the
Company  and (iii)  the  Company  has  delivered  to the  Trustee  an  Officers'
Certificate  and an  Opinion  of  Counsel,  each  stating  that  all  conditions
precedent  referred  to in clause (i) above  relating  to the  satisfaction  and
discharge of this  Indenture  have been complied  with, the Trustee upon request
shall  acknowledge in writing the discharge of the Company's  obligations  under
this Indenture except for those surviving obligations specified in

<page>

                                      -75-

     Section 8.01, provided the legal counsel delivering such Opinion of Counsel
may rely as to  matters  of fact on one or more  Officers'  Certificates  of the
Company.

                                  ARTICLE NINE

                          MODIFICATION OF THE INDENTURE


     SECTION 9.01. Without Consent of Holders.

     Subject to the  provisions of Section  9.02,  the Company,  the  Subsidiary
Guarantors and the Trustee may from time to time amend, waive or supplement this
Indenture without notice to or consent of any Holder: (a) to cure any ambiguity,
defect or inconsistency;  (b) to comply with Section 5.01 of this Indenture; (c)
to add additional  Subsidiary  Guarantors in accordance  with Section 4.20 under
supplemental  indentures  that need be signed only by the additional  Subsidiary
Guarantor(s),   (d)  to  provide  for   uncertificated   Notes  in  addition  to
certificated  Notes;  (e) to comply with any  requirements  of the Commission in
order to effect or maintain the  qualification  of this Indenture under the TIA;
or (f) to make any change that would provide any additional benefit or rights to
the  Holders  or that  does not  adversely  affect  the  rights  of any  Holder.
Notwithstanding  the  foregoing,  the  Trustee  and the Company may not make any
change  that  adversely  affects the rights of any Holder  under this  Indenture
without the consent of such Holder.  In formulating its opinion on such matters,
the Trustee will be entitled to rely on such  evidence as it deems  appropriate,
including,  without  limitation,  solely on an  Opinion  of  Counsel;  provided,
however, that in delivering such Opinion of Counsel, such counsel may rely as to
matters of fact, on a certificate or certificates of officers of the Company.

     SECTION 9.02. With Consent of Holders.

     All other  modifications  and amendments of this Indenture may be made with
the  consent  of the  Holders of a majority  in the then  outstanding  principal
amount of the then outstanding  Notes,  except that, without the consent of each
Holder of the Notes affected thereby,  no amendment may, directly or indirectly:
(i) reduce the amount of Notes whose Holders must consent to any amendment; (ii)
reduce the rate of or change or have the effect of changing the time for payment
of  interest,  including  defaulted  interest,  on any Notes;  (iii)  reduce the
principal of or change or have the effect of changing the fixed  maturity of any
Notes,  or change the date on which any Notes may be subject  to  redemption  or
repurchase, or reduce the redemption or repurchase price therefor; (iv) make any
Notes payable in money other than that stated in the Notes;  (v) make any change
in provisions of this Indenture protecting the right of each Holder of a Note to
receive  payment of  principal  of and interest on such Note on or after the due
date thereof or to bring suit to enforce such payment or permitting Holders of a
majority in  principal  amount of Notes to waive  Defaults or Events of Default;
(vi)  amend,  change or modify in any  material  respect the  obligation  of the
Company  to make and  consummate  a Change  of  Control  Offer in the event of a
Change of Control or make and  consummate a Net  Proceeds  Offer with respect to
any Asset  Sale that has been  consummated  or modify any of the  provisions  or
definitions with respect  thereto;  (vii) modify or change any provision of this
Indenture or Section 1.01 affecting the ranking of the Notes or any Guarantee in
a manner which adversely

<page>

                                      -76-

     affects the Holders; or (viii) release any Subsidiary Guarantor from any of
its  obligations  under  its  Guarantee  or  this  Indenture  otherwise  than in
accordance with the terms of this Indenture.

     SECTION 9.03. Compliance with Trust Indenture Act.

     Every amendment,  waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect; provided, however, that this Section 9.03
shall not of itself  require  that this  Indenture  or the Trustee be  qualified
under the TIA or constitute any admission or  acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.

     SECTION 9.04. Revocation and Effect of Consents.

     Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or  portion  of a Note that  evidences  the same  debt as the  consenting
Holder's Note, even if notation of the consent is not made on any Note.  Subject
to the following paragraph,  any such Holder or subsequent Holder may revoke the
consent  as to such  Holder's  Note or  portion  of such  Note by  notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers'  Certificate  certifying  that the Holders of the requisite  principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment,  supplement  or waiver.  An amendment,  supplement or waiver  becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the  requisite  percentage  in principal  amount of
outstanding Notes.

     The Company may,  but shall not be obligated  to, fix a Record Date for the
purpose of  determining  the  Holders  entitled  to  consent  to any  amendment,
supplement  or waiver,  which Record Date shall be at least 30 days prior to the
first   solicitation  of  such  consent.   If  a  Record  Date  is  fixed,  then
notwithstanding  the second  sentence of the  immediately  preceding  paragraph,
those  Persons who were  Holders at such  Record Date (or their duly  designated
proxies),  and only those  Persons,  shall be  entitled  to revoke  any  consent
previously given,  whether or not such Persons continue to be Holders after such
Record Date.  No such consent  shall be valid or effective for more than 90 days
after such Record Date unless consents from Holders of the requisite  percentage
in  principal   amount  of  outstanding   Notes   required   hereunder  for  the
effectiveness of such consents shall have also been given and not revoked within
such 90 day period.

     SECTION 9.05. Notation on or Exchange of Notes.

     If an  amendment,  supplement  or waiver  changes the terms of a Note,  the
Trustee may require  the Holder of such Note to deliver it to the  Trustee.  The
Trustee may place an  appropriate  notation on the Note about the changed  terms
and return it to the  Holder.  Alternatively,  if the  Company or the Trustee so
determine,  the  Company in  exchange  for the Note shall  issue and the Trustee
shall authenticate a new Note that reflects the changed terms.

<page>

                                      -77-

     SECTION 9.06. Trustee To Sign Amendments, Etc.

     The Trustee shall execute any  amendment,  supplement or waiver  authorized
pursuant to this  Article  Nine;  provided,  however,  that the Trustee may, but
shall not be obligated  to,  execute any such  amendment,  supplement  or waiver
which  affects  the  Trustee's  own  rights,  duties or  immunities  under  this
Indenture.  In executing such supplement or waiver the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it, and shall be fully protected
in  relying  upon an  Opinion of Counsel  and an  Officers'  Certificate  of the
Company,  stating  that no  event of  default  shall  occur as a result  of such
amendment,  supplement  or  waiver  and that  the  execution  of any  amendment,
supplement or waiver  authorized  pursuant to this Article Nine is authorized or
permitted by this Indenture,  provided the legal counsel delivering such Opinion
of Counsel may rely as to matters of fact on one or more Officers'  Certificates
of the Company. Such Opinion of Counsel shall not be an expense of the Trustee.


                                   ARTICLE TEN

                             [INTENTIONALLY OMITTED]

                                 ARTICLE ELEVEN

                                  MISCELLANEOUS


     SECTION 11.01. TIA Controls.

     If any provision of this  Indenture  limits,  qualifies,  or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control; provided, however, that this Section 11.01
shall not of itself  require  that this  Indenture  or the Trustee be  qualified
under the TIA or constitute any admission or  acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.

     SECTION 11.02. Notices.

     Any notices or other  communications  required or permitted hereunder shall
be in writing,  and shall be  sufficiently  given if made by hand  delivery,  by
telex, by telecopier or registered or certified mail,  postage  prepaid,  return
receipt requested, addressed as follows:

<page>

                                      -78-

     if to the Company:

                           c/o Magnum Hunter Resources, Inc.
                           600 East Las Colinas Blvd.
                           Suite 1100
                           Irving, Texas  75039

                           Telecopier Number:  (972) 401-3110
                           Attn:  Chief Executive Officer

     if to the Trustee:

                           Bankers Trust Company
                           Four Albany Street
                           New York, New York  10006

                           Telecopier Number:  (201) 593-6443
                           Attn: Corporate Trust and Agency Services

     Each of the  Company  and the  Trustee by  written  notice to the other may
designate  additional  or different  addresses  for notices to such Person.  Any
notice or  communication  to the Company or the Trustee  shall be deemed to have
been given or made as of the date so delivered if hand delivered;  when answered
back, if telexed; when receipt is acknowledged,  if faxed; and five (5) calendar
days after  mailing if sent by  registered or certified  mail,  postage  prepaid
(except  that a notice  of change  of  address  shall not be deemed to have been
given until actually received by the addressee).

     Any notice or  communication  mailed to a Holder  shall be mailed to him by
first class mail or other  equivalent  means at his address as it appears on the
registration  books of the  Registrar  ten (10) days prior to such  mailing  and
shall be sufficiently given to him if so mailed within the time prescribed.

     Any notice or communication shall also be so mailed to any Person described
in TIA ss. 313(c), to the extent required by the TIA.

     Failure to mail a notice or  communication  to a Holder or any defect in it
shall not affect its sufficiency  with respect to other Holders.  If a notice or
communication is mailed in the manner provided above, it is duly given,  whether
or not the addressee receives it.

     SECTION 11.03. Communications by Holders with Other Holders.

     Holders may communicate  pursuant to TIA ss. 312(b) with other Holders with
respect to their rights  under this  Indenture  or the Notes.  The Company,  the
Trustee, the Registrar and any other Person shall have the protection of TIA ss.
312(c).

<page>

                                      -79-

     SECTION 11.04. Certificate and Opinion as to Conditions Precedent.

     Upon any  request or  application  by the  Company  and/or  any  Subsidiary
Guarantor  to the Trustee to take any action under this  Indenture,  the Company
and/or any Subsidiary Guarantor shall furnish to the Trustee:

     (1) an Officers'  Certificate,  in form and substance  satisfactory  to the
Trustee,  stating that, in the opinion of the signers,  all conditions precedent
to be performed by the Company,  if any, provided for in this Indenture relating
to the proposed action have been complied with; and

     (2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions  precedent to be performed by the Company,  if any, provided for
in this Indenture relating to the proposed action have been complied with (which
counsel, as to factual matters, may rely on an Officers' Certificate).

     SECTION 11.05. Statements Required in Certificate or Opinion.

     Each  certificate or opinion with respect to compliance with a condition or
covenant  provided for in this Indenture,  other than the Officers'  Certificate
required by Section 4.06, shall comply with TIA ss. 314(e) and include:

     (1) a statement that the Person making such certificate or opinion has read
such covenant or condition;

     (2) a brief  statement  as to the  nature and scope of the  examination  or
investigation   upon  which  the  statements  or  opinions   contained  in  such
certificate or opinion are based;

     (3) a  statement  that,  in the  opinion of such  Person,  he has made such
examination or investigation as is reasonably necessary to enable him to express
an informed  opinion as to whether or not such  covenant or  condition  has been
complied with; and

     (4) a statement  as to whether or not, in the opinion of each such  Person,
such condition or covenant has been complied with.

     SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.

     The Trustee may make  reasonable  rules in  accordance  with the  Trustee's
customary  practices for action by or at a meeting of Holders.  The Paying Agent
or Registrar may make reasonable rules for its functions.

     SECTION 11.07. Legal Holidays.

     A "Legal  Holiday" used with respect to a particular  place of payment is a
Saturday,  a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open.  If a payment date is a
Legal  Holiday  at such  place,  payment  may be made

<page>

                                      -80-

     at such place on the next  succeeding day that is not a Legal Holiday,  and
no interest shall accrue for the intervening period.

     SECTION 11.08. Governing Law.

     THIS  INDENTURE  , THE NOTES AND THE  GUARANTEES  SHALL BE  GOVERNED BY AND
CONSTRUED  IN  ACCORDANCE  WITH  THE LAWS OF THE  STATE OF NEW YORK BUT  WITHOUT
GIVING  EFFECT TO  APPLICABLE  PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER  JURISDICTION  WOULD BE REQUIRED  THEREBY.
Each of the parties hereto agrees to submit to the jurisdiction of the courts of
the State of New York in any action or proceeding  arising out of or relating to
this Indenture.

     SECTION 11.09. No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

     SECTION 11.10. No Personal Liability.

     No director,  officer, employee or stockholder,  as such, of the Company or
any Subsidiary Guarantor,  as such, shall have any liability for any obligations
of the Company or any Subsidiary Guarantor under the Notes, this Indenture,  the
Guarantees or the  Registration  Rights  Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.

     SECTION 11.11. Successors.

     All  agreements  of the  Company  and  the  Subsidiary  Guarantors  in this
Indenture,  the  Notes and the  Guarantees  shall  bind  their  successors.  All
agreements of the Trustee in this Indenture shall bind its successors.

     SECTION 11.12. Duplicate Originals.

     All  parties may sign any number of copies of this  Indenture.  Each signed
copy shall be an original,  but all of them  together  shall  represent the same
agreement.

     SECTION 11.13. Severability.

     In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable,  in any respect for any reason,
the validity,  legality and  enforceability of any such provision in every other
respect  and of the  remaining  provisions  shall not in any way be  affected or
impaired  thereby,  it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

<page>

                                      -81-

     SECTION 11.14. Independence of Covenants.

     All covenants and agreements in this Indenture and the Notes shall be given
independent  effect  so  that  if any  particular  action  or  condition  is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another  covenant shall
not avoid the  occurrence  of a Default or an Event of Default if such action is
taken or condition exists.

                                 ARTICLE TWELVE

                               GUARANTEE OF NOTES


     SECTION 12.01. Unconditional Guarantee.

     Subject  to  the  provisions  of  this  Article  Twelve,   each  Subsidiary
Guarantor,   if  any,  hereby,   jointly  and  severally,   unconditionally  and
irrevocably  guarantees,  on an  unsecured  senior  basis (such  guarantee to be
referred to herein as a "Guarantee") to each Holder of a Note  authenticated and
delivered  by the Trustee and to the Trustee  and its  successors  and  assigns,
irrespective of the validity and enforceability of this Indenture,  the Notes or
the obligations of the Company or any other Subsidiary Guarantors to the Holders
or the Trustee hereunder or thereunder,  that: (a) the principal of, premium, if
any, and interest on the Notes (and any  Additional  Interest  payable  thereon)
shall be duly and punctually  paid in full when due,  whether at maturity,  upon
redemption  at the option of Holders  pursuant  to the  provisions  of the Notes
relating  thereto,  by  acceleration  or otherwise,  and interest on the overdue
principal and (to the extent  permitted by law)  interest,  if any, on the Notes
and all other  obligations  of the Company or the  Subsidiary  Guarantors to the
Holders or the  Trustee  hereunder  or  thereunder  (including  amounts  due the
Trustee under Section 7.07 hereof) and all other  obligations  shall be promptly
paid in full or performed,  all in accordance with the terms hereof and thereof;
and (b) in case of any  extension  of time of payment or renewal of any Notes or
any of such other obligations,  the same shall be promptly paid in full when due
or performed in accordance  with the terms of the extension or renewal,  whether
at maturity,  by  acceleration  or  otherwise.  Failing  payment when due of any
amount so  guaranteed,  or failing  performance  of any other  obligation of the
Company to the Holders  under this  Indenture  or under the Notes,  for whatever
reason,  each  Subsidiary  Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same  immediately.  An Event of Default under this
Indenture  or  the  Notes  shall  constitute  an  event  of  default  under  the
Guarantees, and shall entitle the Holders of Notes to accelerate the obligations
of the  Guarantors  hereunder  in the same  manner and to the same extent as the
obligations of the Company.

     Each of the  Subsidiary  Guarantors  hereby  agrees  that  its  obligations
hereunder shall be  unconditional,  irrespective of the validity,  regularity or
enforceability  of the Notes or this  Indenture,  the  absence  of any action to
enforce the same,  any waiver or consent by any Holder of the Notes with respect
to any  provisions  hereof or  thereof,  any  release  of any  other  Subsidiary
Guarantor,  the  recovery of any  judgment  against the  Company,  any action to
enforce the same,  whether or not a Guarantee is affixed to any particular Note,
or any other circumstance which might otherwise

<page>

                                      -82-

     constitute a legal or equitable  discharge or defense of a guarantor.  Each
of  the   Subsidiary   Guarantors   hereby  waives  the  benefit  of  diligence,
presentment,  demand of  payment,  filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company,  protest,  notice and all demands  whatsoever and covenants
that its Guarantee shall not be discharged except by complete performance of the
obligations  contained in the Notes,  this  Indenture and this  Guarantee.  Each
Guarantee is a guarantee of payment and not of collection.  If any Holder or the
Trustee is required by any court or otherwise to return to the Company or to any
Subsidiary  Guarantor,  or any custodian,  trustee,  liquidator or other similar
official  acting in relation to the Company or such  Subsidiary  Guarantor,  any
amount paid by the Company or such  Subsidiary  Guarantor to the Trustee or such
Holder,  this  Guarantee,  to  the  extent  theretofore  discharged,   shall  be
reinstated in full force and effect.  Each Subsidiary  Guarantor  further agrees
that, as between it, on the one hand,  and the Holders of Notes and the Trustee,
on the other  hand,  (a) subject to this  Article  Eleven,  the  maturity of the
obligations  guaranteed  hereby may be  accelerated  as  provided in Article Six
hereof for the purposes of its Guarantee,  notwithstanding any stay,  injunction
or other prohibition  preventing such acceleration in respect of the obligations
guaranteed  hereby, and (b) in the event of any acceleration of such obligations
as  provided in Article Six  hereof,  such  obligations  (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantors for
the purpose of its Guarantee.

     No stockholder,  officer, director, employee or incorporator, past, present
or  future,  or any  Subsidiary  Guarantor,  as such,  shall  have any  personal
liability  under the  Guarantees  by reason  of his,  her or its  status as such
stockholder, officer, director, employee or incorporator.

     SECTION 12.02. Limitations on Guarantees.

     The  obligations of each  Subsidiary  Guarantor under its Guarantee will be
limited to the maximum amount which, after giving effect to all other contingent
and fixed  liabilities of such  Subsidiary  Guarantor and after giving effect to
any  collections  from or payments made by or on behalf of any other  Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Guarantee or pursuant to its contribution  obligations  under the Indenture,
will result in the obligations of such Subsidiary  Guarantor under its Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.

     SECTION 12.03. Execution and Delivery of Guarantee.

     To  further  evidence  its  Guarantee  set  forth in  Section  12.01,  each
Subsidiary   Guarantor   hereby  agrees  that  a  notation  of  such  Guarantee,
substantially  in the form of Exhibit E herein,  shall be  endorsed on each Note
authenticated and delivered by the Trustee.  Such Guarantee shall be executed on
behalf of each Subsidiary  Guarantor by either manual or facsimile  signature of
one Officer of each  Subsidiary  Guarantor,  who, in each case,  shall have been
duly authorized to so execute by all requisite  corporate  action.  The validity
and enforceability of any Guarantee shall not be affected by the fact that it is
not affixed to any particular Note.

<page>

                                      -83-

     Each of the  Subsidiary  Guarantors  hereby  agrees that its  Guarantee set
forth in Section 12.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee.

     If an  Officer  of a  Subsidiary  Guarantor  whose  signature  is  on  this
Indenture  or a  Guarantee  no longer  holds that office at the time the Trustee
authenticates  the Note on  which  such  Guarantee  is  endorsed  or at any time
thereafter,  such Subsidiary  Guarantor's  Guarantee of such Note shall be valid
nevertheless.  The delivery of any Note by the Trustee, after the authentication
thereof  hereunder,  shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Subsidiary Guarantor.

     SECTION 12.04. Release of a Subsidiary Guarantor.

     (a) If no Default exists or would exist under this Indenture,  (i) upon the
sale or disposition of all of the Capital Stock of a Subsidiary Guarantor by the
Company or a Restricted Subsidiary of the Company in a transaction  constituting
an Asset Sale in  accordance  with Section 4.16,  or upon the  consolidation  or
merger of a  Subsidiary  Guarantor  with or into any Person in  compliance  with
Article  Five (in each case,  other than to the Company or an  Affiliate  of the
Company  or  a  Restricted  Subsidiary),  or  (ii)  upon  the  designation  of a
Subsidiary  Guarantor as an  Unrestricted  Subsidiary in accordance with Section
4.14, such Subsidiary Guarantor and each Subsidiary of such Subsidiary Guarantor
that  is  also  a  Subsidiary  Guarantor  shall  be  deemed  released  from  all
obligations under this Article Twelve without any further action required on the
part of the Trustee or any Holder; provided,  however, that each such Subsidiary
Guarantor  is  sold  or  disposed  of or  designated  in  accordance  with  this
Indenture. Any Subsidiary Guarantor not so released or the entity surviving such
Subsidiary  Guarantor,  as  applicable,  shall  remain  or be  liable  under its
Guarantee as provided in this Article Twelve.

     (b) The Trustee  shall deliver an  appropriate  instrument  evidencing  the
release of a  Subsidiary  Guarantor  upon receipt of a request by the Company or
such Subsidiary Guarantor accompanied by an Officers' Certificate and an Opinion
of Counsel certifying as to the compliance with this Section 12.04, provided the
legal counsel  delivering such Opinion of Counsel may rely as to matters of fact
on one or more Officers Certificates of the Company.

     The Trustee shall execute any documents reasonably requested by the Company
or a Subsidiary  Guarantor  in order to evidence the release of such  Subsidiary
Guarantor  from its  obligations  under its Guarantee  endorsed on the Notes and
under this Article Twelve.

     Except  as set  forth in  Articles  Four and Five and this  Section  12.04,
nothing  contained in this  Indenture  or in any of the Notes shall  prevent any
consolidation  or merger of a Subsidiary  Guarantor  with or into the Company or
another  Subsidiary  Guarantor or shall  prevent any sale or  conveyance  of the
property  of a  Subsidiary  Guarantor  as an  entirety  or  substantially  as an
entirety to the Company or another Subsidiary Guarantor.

<page>

                                      -84-

     SECTION 12.05. Waiver of Subrogation.

     Until this  Indenture is discharged and all of the Notes are discharged and
paid in full, each Subsidiary Guarantor hereby irrevocably waives and agrees not
to exercise  any claim or other  rights  which it may now or  hereafter  acquire
against the  Company  that arise from the  existence,  payment,  performance  or
enforcement of the Company's  obligations  under the Notes or this Indenture and
such Subsidiary Guarantor's  obligations under its Guarantee and this Indenture,
in any such instance including,  without  limitation,  any right of subrogation,
reimbursement,  exoneration,  contribution,  indemnification,  and any  right to
participate in any claim or remedy of the Holders  against the Company,  whether
or not such claim, remedy or right arises in equity, or under contract,  statute
or common law, including,  without limitation, the right to take or receive from
the Company,  directly or indirectly, in cash or other property or by set-off or
in any other  manner,  payment  or  security  on  account of such claim or other
rights. If any amount shall be paid to any Subsidiary  Guarantor in violation of
the  preceding  sentence and any amounts  owing to the Trustee or the Holders of
Notes under the Notes,  this  Indenture,  or any other  document  or  instrument
delivered under or in connection with such agreements or instruments,  shall not
have been paid in full,  such amount shall have been deemed to have been paid to
such Subsidiary  Guarantor for the benefit of, and held in trust for the benefit
of, the Trustee or the Holders  and shall  forthwith  be paid to the Trustee for
the  benefit  of  itself or such  Holders  to be  credited  and  applied  to the
obligations in favor of the Trustee or the Holders,  as the case may be, whether
matured or  unmatured,  in  accordance  with the terms of this  Indenture.  Each
Subsidiary  Guarantor  acknowledges  that it will  receive  direct and  indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 12.05 is knowingly made in contemplation of
such benefits.

     SECTION 12.06. Immediate Payment.

     Each Subsidiary  Guarantor agrees to make immediate  payment to the Trustee
on behalf of the Holders of all  Obligations  owing or payable to the respective
Holders  upon  receipt of a demand for  payment  therefor by the Trustee to such
Subsidiary Guarantor in writing.

     SECTION 12.07. No Set-Off.

     Each payment to be made by a Subsidiary  Guarantor  hereunder in respect of
the  Obligations  shall be payable in the currency or  currencies  in which such
Obligations are denominated,  and shall be made without  set-off,  counterclaim,
reduction or diminution of any kind or nature.

     SECTION 12.08. Obligations Absolute.

     The  obligations of each  Subsidiary  Guarantor  hereunder are and shall be
absolute and  unconditional  and any monies or amounts  expressed to be owing or
payable by each Subsidiary Guarantor hereunder which may not be recoverable from
such Subsidiary  Guarantor on the basis of a Guarantee shall be recoverable from
such Subsidiary  Guarantor as a primary obligor and principal  debtor in respect
thereof.

<page>

                                      -85-

     SECTION 12.09. Obligations Continuing.

     The obligations of each Subsidiary  Guarantor hereunder shall be continuing
and shall  remain in full force and effect until all the  obligations  have been
paid and satisfied in full.  Each Subsidiary  Guarantor  agrees with the Trustee
that it will from time to time deliver to the Trustee  suitable  acknowledgments
of this  continued  liability  hereunder  and  under  any  other  instrument  or
instruments  in such form as  counsel  to the  Trustee  may  advise  and as will
prevent any action brought against it in respect of any default  hereunder being
barred by any statute of limitations now or hereafter in force and, in the event
of the  failure  of a  Subsidiary  Guarantor  so to do,  it  hereby  irrevocably
appoints  the Trustee the  attorney  and agent of such  Subsidiary  Guarantor to
make,  execute and deliver such written  acknowledgment  or  acknowledgments  or
other instruments as may from time to time become necessary or advisable, in the
judgment of the Trustee on the advice of counsel,  to fully maintain and keep in
force the liability of such Subsidiary Guarantor hereunder.

     SECTION 12.10. Obligations Not Reduced.

     The  obligations  of  each  Subsidiary  Guarantor  hereunder  shall  not be
satisfied,  reduced  or  discharged  solely by the  payment  of such  principal,
premium,  if any, interest,  fees and other monies or amounts as may at any time
prior to discharge of this Indenture pursuant to Article 8 be or become owing or
payable under or by virtue of or otherwise in connection  with the Notes or this
Indenture.

     SECTION 12.11. Obligations Reinstated.

     The obligations of each Subsidiary Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the  obligations of any Subsidiary  Guarantor
hereunder  (whether  such  payment  shall  have been made by or on behalf of the
Company or by or on behalf of a Subsidiary  Guarantor) is rescinded or reclaimed
from  any of  the  Holders  upon  the  insolvency,  bankruptcy,  liquidation  or
reorganization of the Company or any Subsidiary  Guarantor or otherwise,  all as
though such  payment had not been made.  If demand for, or  acceleration  of the
time for,  payment by the  Company is stayed  upon the  insolvency,  bankruptcy,
liquidation or  reorganization of the Company,  all such Indebtedness  otherwise
subject to demand for payment or  acceleration  shall  nonetheless be payable by
each Subsidiary Guarantor as provided herein.

     SECTION 12.12. Obligations Not Affected.

     The  obligations  of  each  Subsidiary  Guarantor  hereunder  shall  not be
affected,  impaired or  diminished  in any way by any act,  omission,  matter or
thing  whatsoever,  occurring  before,  upon or after  any  demand  for  payment
hereunder (and whether or not known or consented to by any Subsidiary  Guarantor
or any of the Holders) which,  but for this provision,  might constitute a whole
or partial  defense to a claim  against any  Subsidiary  Guarantor  hereunder or
might operate to release or otherwise  exonerate any  Subsidiary  Guarantor from
any of its obligations  hereunder or otherwise affect such obligations,  whether
occasioned  by default of any of the Holders or  otherwise,  including,  without
limitation:

<page>

                                      -86-

     (a) any  limitation  of status or power,  disability,  incapacity  or other
circumstance  relating  to  the  Company  or any  other  person,  including  any
insolvency, bankruptcy, liquidation, reorganization,  readjustment, composition,
dissolution,  winding up or other proceeding  involving or affecting the Company
or any other person;

     (b) any irregularity,  defect, unenforceability or invalidity in respect of
any  Indebtedness  or other  obligation of the Company or any other person under
this Indenture, the Notes or any other document or instrument;

     (c) any failure of the Company, whether or not without fault on their part,
to perform or comply with any of the  provisions of this Indenture or the Notes,
or to give notice thereof to a Subsidiary Guarantor;

     (d) the taking or enforcing or exercising or the refusal or neglect to take
or enforce or  exercise  any right or remedy  from or against the Company or any
other person or their respective  assets or the release or discharge of any such
right or remedy;

     (e) the granting of time, renewals, extensions,  compromises,  concessions,
waivers, releases,  discharges and other indulgences to the Company or any other
Person;

     (f) any change in the time,  manner or place of payment of, or in any other
term of,  any of the  Notes,  or any  other  amendment,  variation,  supplement,
replacement or waiver of, or any consent to departure  from, any of the Notes or
this Indenture,  including,  without limitation, any increase or decrease in the
principal amount of or premium, if any, or interest on any of the Notes;

     (g) any  change  in the  ownership,  control,  name,  objects,  businesses,
assets,  capital  structure  or  constitution  of the  Company  or a  Subsidiary
Guarantor;

     (h) any merger or  amalgamation  of the Company or a  Subsidiary  Guarantor
with any Person or Persons;

     (i) the  occurrence  of any  change  in the  laws,  rules,  regulations  or
ordinances  of  any  jurisdiction  by  any  present  or  future  action  of  any
governmental  authority  or  court  amending,  varying,  reducing  or  otherwise
affecting,  or purporting to amend, vary, reduce or otherwise affect, any of the
Obligations or the  obligations of a Subsidiary  Guarantor  under its Guarantee;
and

     (j) any other circumstance (other than by complete,  irrevocable  payment),
including release of any other Subsidiary  Guarantor  pursuant to Section 12.04,
that might otherwise constitute a legal or equitable discharge or defense of the
Company  under  this  Indenture  or the Notes or of a  Subsidiary  Guarantor  in
respect of its Guarantee hereunder.

<page>

                                      -87-

     SECTION 12.13. Waiver.

     Without in any way limiting the  provisions of Section  11.01 hereof,  each
Subsidiary  Guarantor hereby waives notice of acceptance  hereof,  notice of any
liability of any Subsidiary Guarantor hereunder,  notice or proof of reliance by
the Holders upon the  obligations of any  Subsidiary  Guarantor  hereunder,  and
diligence,  presentment,  demand for payment on the Company,  protest, notice of
dishonor  or  non-payment  of  any  of  the  Obligations,  or  other  notice  or
formalities to the Company or any Subsidiary Guarantor of any kind whatsoever.

     SECTION 12.14. No Obligation To Take Action Against the Company.

     Neither the  Trustee  nor any other  Person  shall have any  obligation  to
enforce or exhaust  any rights or  remedies or to take any other steps under any
security for the  Obligations  or against the Company or any other Person or any
Property  of the Company or any other  Person  before the Trustee is entitled to
demand  payment and  performance  by any or all  Subsidiary  Guarantors of their
liabilities and obligations under their Guarantees or under this Indenture.

     SECTION 12.15. Dealing with the Company and Others.

     The  Holders,  without  releasing,   discharging,   limiting  or  otherwise
affecting in whole or in part the  obligations and liabilities of any Subsidiary
Guarantor  hereunder  and  without  the  consent of or notice to any  Subsidiary
Guarantor, may

     (a) grant time, renewals, extensions,  compromises,  concessions,  waivers,
releases, discharges and other indulgences to the Company or any other Person;

     (b) take or abstain from taking  security or collateral from the Company or
from perfecting security or collateral of the Company;

     (c) release, discharge, compromise, realize, enforce or otherwise deal with
or do any act or thing in respect of (with or without consideration) any and all
collateral,  mortgages or other security given by the Company or any third party
with respect to the obligations or matters contemplated by this Indenture or the
Notes;

     (d) accept compromises or arrangements from the Company;

     (e) apply all  monies at any time  received  from the  Company  or from any
security upon such part of the  Obligations as the Holders may see fit or change
any such  application  in whole or in part from time to time as the  Holders may
see fit; and

     (f) otherwise  deal with, or waive or modify their right to deal with,  the
Company and all other Persons and any security as the Holders or the Trustee may
see fit.

<page>

                                      -88-

     SECTION 12.16. Default and Enforcement.

     If any Subsidiary  Guarantor  fails to pay in accordance with Section 12.06
hereof,  the  Trustee  may  proceed  in its  name as  trustee  hereunder  in the
enforcement  of  the  Guarantee  of  any  such  Subsidiary  Guarantor  and  such
Subsidiary  Guarantor's  obligations  thereunder  and  hereunder  by any  remedy
provided by law, whether by legal proceedings or otherwise,  and to recover from
such Subsidiary Guarantor the obligations.

     SECTION 12.17. Amendment, Etc.

     No amendment,  modification  or waiver of any  provision of this  Indenture
relating  to  any  Subsidiary  Guarantor  or  consent  to any  departure  by any
Subsidiary  Guarantor  or any other Person from any such  provision  will in any
event be  effective  unless it is signed by such  Subsidiary  Guarantor  and the
Trustee.

     SECTION 12.18. Acknowledgment.

     Each Subsidiary Guarantor hereby acknowledges communication of the terms of
this Indenture and the Notes and consents to and approves of the same.

     SECTION 12.19. Costs and Expenses.

     Each  Subsidiary  Guarantor  shall pay on demand by the Trustee any and all
reasonable costs, fees and expenses (including,  without limitation,  legal fees
on a solicitor and client basis) incurred by the Trustee,  its agents,  advisors
and counsel or any of the Holders in  enforcing  any of their  rights  under any
Guarantee.

     SECTION 12.20. No Merger or Waiver; Cumulative Remedies.

     No Guarantee  shall operate by way of merger of any of the obligations of a
Subsidiary Guarantor under any other agreement,  including,  without limitation,
this Indenture.  No failure to exercise and no delay in exercising,  on the part
of the Trustee or the Holders,  any right,  remedy, power or privilege hereunder
or under this  Indenture or the Notes,  shall operate as a waiver  thereof;  nor
shall any single or partial  exercise of any right,  remedy,  power or privilege
hereunder  or under this  Indenture  or the Notes  preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights,  remedies,  powers and  privileges  in the  Guarantee and under this
Indenture,  the Notes and any other document or instrument  between a Subsidiary
Guarantor and/or the Company and the Trustee are cumulative and not exclusive of
any rights, remedies, powers and privilege provided by law.

     SECTION 12.21. Survival of Obligations.

     Without  prejudice to the survival of any of the other  obligations of each
Subsidiary  Guarantor  hereunder,  the obligations of each Subsidiary  Guarantor
under  Section 12.01 shall  survive the payment in full of the  Obligations  and
shall be enforceable  against such  Subsidiary  Guarantor

<page>

                                      -89-

     without regard to and without giving effect to any defense, right of offset
or  counterclaim  available  to or which may be  asserted  by the Company or any
Subsidiary Guarantor.

     SECTION 12.22. Guarantee in Addition to Other Obligations.

     The obligations of each  Subsidiary  Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution  for any other  obligations
to the Trustee or to any of the Holders in  relation  to this  Indenture  or the
Notes and any  guarantees  or security at any time held by or for the benefit of
any of them.

     SECTION 12.23. Severability.

     Any provision of this Article  Twelve which is prohibited or  unenforceable
in any jurisdiction  shall not invalidate the remaining  provisions and any such
prohibition  or  unenforceability  in any  jurisdiction  shall not invalidate or
render unenforceable such provision in any other jurisdiction unless its removal
would  substantially  defeat  the  basic  intent,  spirit  and  purpose  of this
Indenture and this Article Twelve.

     SECTION 12.24. Successors and Assigns.

     Each  Guarantee  shall be  binding  upon and inure to the  benefit  of each
Subsidiary  Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Subsidiary Guarantor may assign
any of its obligations hereunder or thereunder.

<PAGE>

                                      S-41

                                   SIGNATURES

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Indenture to be
duly executed, all as of the date first written above.

                                            MAGNUM HUNTER RESOURCES, INC.


                                            By:____________________________
                                                Name:
                                                Title:


                                            MAGNUM HUNTER PRODUCTION, INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            GRUY PETROLEUM MANAGEMENT CO.
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            HUNTER GAS GATHERING, INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            TRAPMAR PROPERTIES, INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:

<PAGE>

                                      S-2



                                            CONMAG ENERGY CORPORATION,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            PINTAIL ENERGY, INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            PRIZE OPERATING COMPANY,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


                                            PEC (DELAWARE), INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


<PAGE>

                                      S-3


                                            PRIZE ENERGY RESOURCES, L.P.,
                                            as Guarantor

                                            By: Prize Operating Company,
                                                 its General Partner


                                            By:____________________________
                                                Name:
                                                Title:


                                            OKLAHOMA GAS PROCESSING, INC.,
                                            as Guarantor


                                            By:____________________________
                                                Name:
                                                Title:


<PAGE>

                                      S-4


                                            Bankers Trust Company
                                                as Trustee


                                            By:____________________________
                                                Name:
                                                Title:



<PAGE>
                                                                       EXHIBIT A

                                                             CUSIP No.:  [     ]

                          MAGNUM HUNTER RESOURCES, INC.
                      9.60 % SENIOR NOTE DUE 2012, SERIES A

No. [         ]                                                             $[ ]

     MAGNUM HUNTER RESOURCES,  INC., a Nevada  corporation (the "Company," which
term includes any successor  entities),  for value  received  promises to pay to
CEDE & CO. or  registered  assigns the principal sum of [ ] Dollars on March 15,
2012.

     Interest Payment Dates: March 15 and September 15, commencing September 15,
2002.

     Record Dates: March 1 and September 1

     Reference is made to the further  provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.

     IN WITNESS WHEREOF,  the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.

                                        MAGNUM HUNTER RESOURCES, INC.


                                        By:____________________________
                                                 Name:
                                                 Title:

                                        By:____________________________
                                                 Name:
                                                 Title:
Dated:

Certificate of Authentication

     This is one of the 9.60% Senior Notes due 2012, Series A referred to in the
within-mentioned Indenture.

                                        Bankers Trust Company,
                                        as Trustee

                                        By:_____________________________
                                               Authorized Signatory

Date of Authentication:

<PAGE>

                              (REVERSE OF SECURITY)

                      9.60 % Senior Note due 2012, Series A


     (1) Interest.  MAGNUM HUNTER  RESOURCES,  INC., a Nevada  corporation  (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum  shown  above.  Interest  on the Notes will  accrue from the most
recent date on which  interest  has been paid or, if no interest  has been paid,
from March 15, 2002. The Company will pay interest  semi-annually  in arrears on
each Interest  Payment  Date,  commencing  September 15, 2002.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed.

     The  Company  shall  pay  interest  on  overdue  principal  and on  overdue
installments  of  interest  from time to time on demand at the rate borne by the
Notes and on overdue  installments of interest (without regard to any applicable
grace periods) to the extent lawful.

     (2) Method of Payment.  The Company shall pay interest on the Notes (except
defaulted  interest) to the Persons who are the registered  Holders at the close
of business on the Record Date  immediately  preceding the Interest Payment Date
even if the Notes are canceled on  registration  of transfer or  registration of
exchange   (including   pursuant  to  an  Exchange  Offer  (as  defined  in  the
Registration  Rights  Agreement)) after such Record Date. Holders must surrender
Notes to a Paying Agent to collect  principal  payments.  The Company  shall pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S.  Legal  Tender").
The Company may deliver any such  interest  payment to the Paying  Agent or to a
Holder at the Holder's registered address.

     (3) Paying  Agent and  Registrar.  Initially,  Bankers  Trust  Company (the
"Trustee")  will act as Paying Agent and  Registrar.  The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.

     (4) Indenture. The Company issued the Notes under an Indenture, dated as of
March 15, 2002 (the "Indenture"),  among the Company, the Subsidiary  Guarantors
and the Trustee. This Note is one of a duly authorized issue of Initial Notes of
the  Company  designated  as its 9.60 % Senior  Notes  due  2012,  Series A (the
"Initial Notes").  The Notes include the Initial Notes, any Additional Notes and
the Exchange Notes,  as defined below,  issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement. The Initial Notes, any Additional
Notes and the Exchange  Notes are treated as a single class of securities  under
the  Indenture.  Capitalized  terms herein are used as defined in the  Indenture
unless otherwise defined herein.  The terms of the Notes include those stated in
the  Indenture  and those made part of the  Indenture  by reference to the Trust
Indenture  Act of 1939 (15 U.S.  Code ss.ss.  77aaa-77bbbb)  (the "TIA"),  as in
effect on the date of the  Indenture.  Notwithstanding  anything to the contrary
herein,  the Notes are  subject  to all such  terms,  and  Holders  of Notes are
referred to the  Indenture  and said Act for a statement of them.  The Notes are
general unsecured obligations of the Company. Payment on each Note is guaranteed
on a senior  basis by the  Subsidiary  Guarantors  pursuant to Article 12 of the
Indenture.  Each Holder,  by accepting a Note,  agrees to be bound by all of the
terms and provisions of the  Indenture,  as the same may be amended from time to
time in accordance with its terms.

                                      A-2
<page>

     (5) Redemption.  The Notes will be redeemable,  at the Company's option, in
whole at any time or in part from time to time,  on and  after  March 15,  2007,
upon not less than 30 nor more than 60 days' notice, at the following Redemption
Prices  (expressed as percentages of the principal  amount  thereof) if redeemed
during the  twelve-month  period  commencing  on March 15 of the years set forth
below,  plus, in each case,  accrued  interest,  if any,  thereon to the date of
redemption:

Year                                            Percentage
----                                            ----------
2007..................................           104.800%
2008..................................           103.200%
2009..................................           101.600%
2010 and thereafter...................           100.000%

     At any time,  or from  time to time,  on or prior to March  15,  2005,  the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity  Offerings to redeem up to 35% of the aggregate  principal amount
of the Notes  originally  issued at a redemption  price equal to 109.600% of the
aggregate  principal amount of the Notes to be redeemed,  plus accrued interest,
if any, thereon to the date of redemption;  provided, however, that at least 65%
of the aggregate principal amount of Notes originally issued remains outstanding
immediately  after giving effect to any such redemption.  In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company shall
make such  redemption not more than 60 days after the  consummation  of any such
Equity Offering.

     (6) Notice of Redemption.  Notice of redemption  will be mailed at least 30
days but not more than 60 days  before  the  Redemption  Date to each  Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.

     Except as set forth in the  Indenture,  if monies for the redemption of the
Notes called for redemption  shall have been deposited with the Paying Agent for
redemption on such Redemption  Date,  then,  unless the Company  defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption  will cease to bear interest from and after such  Redemption Date
and the only right of the  Holders  of such Notes will be to receive  payment of
the Redemption Price plus accrued interest, if any.

     (7) Offers to Purchase.  Sections  4.15 and 4.16 of the  Indenture  provide
that,  after  certain  Asset  Sales (as defined in the  Indenture)  and upon the
occurrence of a Change of Control (as defined in the Indenture),  and subject to
further  limitations  contained  therein,  the  Company  will  make an  offer to
purchase  certain  amounts of the Notes in accordance  with the  procedures  set
forth in the Indenture.

     (8)  Registration  Rights.  Pursuant to the  Registration  Rights Agreement
among the Company,  the Subsidiary  Guarantors and the Initial  Purchasers,  the
Company  and the  Subsidiary  Guarantors  will be  obligated  to  consummate  an
exchange offer pursuant to which the Holder of this Note shall have the right to
exchange this Note for the Company's 9.60 % Senior Notes due 2012, Series B (the
"Exchange Notes"),  which have been registered under the Securities Act, in like
principal  amount and having terms  identical  in all  material  respects as the
Initial  Notes.  The Holders of the  Initial  Notes shall be entitled to receive
certain  additional  interest  payments in the event such

                                      A-3
<page>

     exchange offer is not  consummated and upon certain other  conditions,  all
pursuant  to and in  accordance  with  the  terms  of  the  Registration  Rights
Agreement.

     (9) Denominations;  Transfer;  Exchange.  The Notes are in registered form,
without   coupons,   and  (except  Notes  issued  as  payment  of  Interest)  in
denominations  of $1,000  and  integral  multiples  of  $1,000.  A Holder  shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar  may require a Holder,  among  other  things,  to furnish  appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental  charges  payable  in  connection  therewith  as  permitted  by the
Indenture.  The  Registrar  need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.

     (10)  Persons  Deemed  Owners.  The  registered  Holder of a Note  shall be
treated as the owner of it for all purposes.

     (11)  Unclaimed  Money.  If money for the payment of  principal or interest
remains  unclaimed  for one year,  the Trustee and the Paying Agent will pay the
money back to the  Company.  After that,  all  liability of the Trustee and such
Paying Agent with respect to such money shall cease.

     (12) Discharge Prior to Redemption or Maturity.  If the Company at any time
deposit  with the  Trustee  U.S.  Legal  Tender or U.S.  Government  Obligations
sufficient  to pay the  principal of and interest on the Notes to  redemption or
maturity and comply with the other provisions of the Indenture relating thereto,
the Company will be discharged from certain  provisions of the Indenture and the
Notes (including certain covenants, but including,  under certain circumstances,
its  obligation  to pay the  principal  of and interest on the Notes but without
affecting the rights of the Holders to receive such amounts from such deposits).

     (13) Amendment; Supplement; Waiver. Subject to certain exceptions set forth
in the Indenture, the Indenture or the Notes may be amended or supplemented with
the  written  consent of the  Holders of not less than a majority  in  aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or  noncompliance  with any  provision  may be waived  with the  written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding.  Without notice to or consent of any Holder,  the
parties  thereto may amend or  supplement  the  Indenture or the Notes to, among
other  things,  cure  any  ambiguity,  defect  or  inconsistency,   provide  for
uncertificated  Notes in addition to or in place of certificated  Notes,  comply
with any  requirements  of the  Commission  in order to effect or  maintain  the
qualification  of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely  affect the rights of
any Holder of a Note.

     (14) Restrictive  Covenants.  The Indenture imposes certain  limitations on
the ability of the  Company  and the  Restricted  Subsidiaries  to,  among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness,  make certain Investments, create or incur liens,
enter into  transactions  with  Affiliates,  create  dividend  or other  payment
restrictions affecting Restricted  Subsidiaries,  issue Preferred Stock of their
Restricted Subsidiaries,  and on the ability of the Company and their Restricted
Subsidiaries  to merge or  consolidate  with any other  Person or sell,  assign,
transfer,  lease, convey or otherwise dispose of all or substantially all of the
Company's  and  their  Restricted  Subsidiaries'  assets  or  adopt  a  plan  of
liquidation.   Such   limitations   are   subject  to  a  number  of   important
qualifications  and exceptions.  Pursuant to

                                      A-4
<page>

     Section  4.06 of the  Indenture,  the Company must  annually  report to the
Trustee on compliance with such limitations.

     (15)  Successors.   When  a  successor  assumes,  in  accordance  with  the
Indenture,  all the  obligations  of its  predecessor  under  the  Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.

     (16) Defaults and  Remedies.  Except as set forth in the  Indenture,  if an
Event of Default  occurs and is  continuing,  the  Trustee or the Holders of not
less than 25% in principal  amount of Notes then outstanding may declare all the
Notes to be due and  payable  in the  manner,  at the  time and with the  effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes  except as provided in the  Indenture.  The  Trustee is not  obligated  to
enforce the Indenture or the Notes unless it has received  indemnity  reasonably
satisfactory  to it. The  Indenture  permits,  subject  to  certain  limitations
therein  provided,  Holders of a majority in aggregate  principal  amount of the
Notes then  outstanding  to direct the  Trustee in its  exercise of any trust or
power.  The Trustee may withhold from Holders of Notes notice of any  continuing
Default  or Event of  Default  (except a Default  in  payment  of  principal  or
interest when due, for any reason or a Default in  compliance  with Article Five
of the Indenture) if it determines that withholding notice is in their interest.

     (17) Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other  capacity,  may become the owner or pledgee of Notes and
may otherwise  deal with the Company,  their  Subsidiaries  or their  respective
Affiliates as if it were not the Trustee.

     (18) No Recourse Against Others. No partner, director, officer, employee or
stockholder, as such, of the Company or any Subsidiary Guarantor, as such, shall
have  any  liability  for  any  obligations  of the  Company  or any  Subsidiary
Guarantor  under the Notes,  the Indenture,  the Guarantees or the  Registration
Rights Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their  creation.  Each Holder of Notes by accepting a Note waives
and  releases  all  such  liability.  The  waiver  and  release  are part of the
consideration for the issuance of the Notes.

     (19)  Guarantees.  This Note will be  entitled  to the  benefits of certain
Guarantees,  if any,  made for the benefit of the  Holders.  Reference is hereby
made to the Indenture for a statement of the respective  rights,  limitations of
rights,  duties and  obligations  thereunder of the Subsidiary  Guarantors,  the
Trustee and the Holders.

     (20)  Authentication.  This Note  shall not be valid  until the  Trustee or
Authenticating  Agent manually signs the certificate of  authentication  on this
Note.

     (21)  Governing  Law. This Note and the Indenture  shall be governed by and
construed in  accordance  with the laws of the State of New York,  as applied to
contracts  made and performed  within the State of New York,  without  regard to
principles of conflict of laws.  Each of the parties  hereto agrees to submit to
the  jurisdiction  of the  courts  of the  State  of New York in any  action  or
proceeding arising out of or relating to this Note.

     (22) Abbreviations and Defined Terms.  Customary  abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common),  TEN ENT

                                      A-5
<page>

     (=  tenants  by the  entireties),  JT TEN (= joint  tenants  with  right of
survivorship and not as tenants in common),  CUST (= Custodian),  and U/G/M/A (=
Uniform Gifts to Minors Act).

     (23)  CUSIP  Numbers.  Pursuant  to a  recommendation  promulgated  by  the
Committee on Uniform Security Identification  Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience  to the Holders of the
Notes. No  representation  is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

     The Company will  furnish to any Holder of a Note upon written  request and
without  charge  a copy  of the  Indenture,  which  has the  text of this  Note.
Requests may be made to: Magnum  Hunter  Resources,  Inc.,  600 East Las Colinas
Blvd., Suite 1100, Irving, Texas 75039.

                                      A-6

<PAGE>

                                 ASSIGNMENT FORM


     If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:

     I or we assign and transfer this Note to:

     ---------------------------------------------------------------

     ---------------------------------------------------------------

     ---------------------------------------------------------------

     (Print or type name,  address  and zip code and social  security  or tax ID
number of assignee)

     and irrevocably appoint  _______________________________________,  agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.


Dated: _____________________  Signed:___________________________
                                     (Sign exactly as your name appears
                                        on the other side of this Note)

Signature Guarantee:___________________________________________

     In connection  with any transfer of this Note  occurring  prior to the date
which is the earlier of (i) the date of the declaration by the Commission of the
effectiveness  of a registration  statement under the Securities Act of 1933, as
amended  (the   "Securities   Act")   covering   resales  of  this  Note  (which
effectiveness  shall not have been  suspended or  terminated  at the date of the
transfer)  and (ii) [ ], the  undersigned  confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer:


                                      A-7
<PAGE>

                                   [Check One]

     (1) __ to the Company or a subsidiary thereof; or

     (2) __ pursuant to and in  compliance  with Rule 144A under the  Securities
Act of 1933, as amended; or

     (3) __ to an  institutional  "accredited  investor"  (as  defined  in  Rule
501(a)(1),  (2), (3) or (7) under the  Securities  Act of 1933, as amended) that
has furnished to the Trustee a signed letter containing certain  representations
and agreements (the form of which letter can be obtained from the Trustee); or

     (4) __ outside the United states to a "foreign  person" in compliance  with
Rule 904 of Regulation S under the Securities Act of 1933, as amended; or

     (5) __ pursuant to the  exemption  from  registration  provided by Rule 144
under the Securities Act of 1933, as amended; or

     (6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or

     (7) __  pursuant  to  another  available  exemption  from the  registration
requirements of the Securities Act of 1933, as amended.

     and unless the box below is checked,  the  undersigned  confirms  that such
Note is not being  transferred  to an  "affiliate"  of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):

     [ ] The transferee is an Affiliate of the Company.

     Unless one of the items is checked, the Trustee will refuse to register any
of the Notes evidenced by this  certificate in the name of any person other than
the  registered  Holder  thereof  unless  and until the  conditions  to any such
transfer of  registration  set forth herein and in Section 2.17 of the Indenture
shall have been satisfied;  provided, however, that if item (3), (4), (5) or (7)
is checked,  the Company or the Trustee may require,  prior to  registering  any
such  transfer  of the  Notes,  in their sole  discretion,  such  written  legal
opinions,  certifications (including an investment letter in the case of box (3)
or (4)) and other  information  as the  Trustee or the Company  have  reasonably
requested to confirm that such  transfer is being made  pursuant to an exemption
from, or in a transaction not subject to, the  registration  requirements of the
Securities Act of 1933, as amended.

Dated: _____________________  Signed:__________________________________
                                      (Sign exactly as your name appears
                                         on the other side of this Note)

Signature Guarantee:___________________________________________

                                      A-8
<page>

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

     The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended and
is  aware  that  the  sale to it is  being  made in  reliance  on Rule  144A and
acknowledges that it has received such information  regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such  information  and that it is aware that the  transferor is relying upon the
undersigned's  foregoing  representations  in order to claim the exemption  from
registration provided by Rule 144A.

Dated: __________________     ________________________________________
                              NOTICE: To be executed by
                                      an executive officer

                                      A-9

<PAGE>

                      [OPTION OF HOLDER TO ELECT PURCHASE]

     If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:

     Section 4.15 [ ]
     Section 4.16 [ ]

     If you  want to elect  to have  only  part of this  Note  purchased  by the
Company  pursuant to Section  4.15 or Section 4.16 of the  Indenture,  state the
amount you elect to have purchased:


$
 -------------------


Dated: _________________
                           ----------------------------------------------------
                                               NOTICE:  The signature on this
                                               assignment must correspond with
                                               the name as it appears upon the
                                               face of the within Note in every
                                               particular without alteration
                                               or enlargement or any change
                                               whatsoever and be guaranteed.


Signature Guarantee:  _____________________________


                                      A-10

<PAGE>
                                                                       EXHIBIT B

                                                             CUSIP No.:  [     ]

                          MAGNUM HUNTER RESOURCES, INC.
                      9.60 % SENIOR NOTE DUE 2012, SERIES B

No. [         ]                                                             $[ ]

     MAGNUM HUNTER RESOURCES,  INC., a Nevada  corporation (the "Company," which
term includes any successor  entities),  for value  received  promises to pay to
CEDE & CO. or  registered  assigns the principal sum of [ ] Dollars on March 15,
2012.

     Interest Payment Dates: March 15 and September 15, commencing September 15,
2002.

     Record Dates: March 1 and September 1

     Reference is made to the further  provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.

     IN WITNESS WHEREOF,  the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.

                                                MAGNUM HUNTER RESOURCES, INC.


                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:
Dated:

Certificate of Authentication

     This is one of the 9.60 % Senior  Notes due 2012,  Series B referred  to in
the within-mentioned Indenture.

                                              Bankers Trust Company, as Trustee

                                              By:______________________________
                                                    Authorized Signatory

Date of Authentication:

                                      B-1
<PAGE>


                              (REVERSE OF SECURITY)

                      9.60 % Senior Note due 2012, Series B


     (1) Interest.  MAGNUM HUNTER  RESOURCES,  INC., a Nevada  corporation  (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum  shown  above.  Interest  on the Notes will  accrue from the most
recent date on which  interest  has been paid or, if no interest  has been paid,
from March 15, 2002. The Company will pay interest  semi-annually  in arrears on
each Interest  Payment  Date,  commencing  September 15, 2002.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed.

     The  Company  shall  pay  interest  on  overdue  principal  and on  overdue
installments  of  interest  from time to time on demand at the rate borne by the
Notes and on overdue  installments of interest (without regard to any applicable
grace periods) to the extent lawful.

     (2) Method of Payment.  The Company shall pay interest on the Notes (except
defaulted  interest) to the Persons who are the registered  Holders at the close
of business on the Record Date  immediately  preceding the Interest Payment Date
even if the Notes are canceled on  registration  of transfer or  registration of
exchange after such Record Date.  Holders must surrender Notes to a Paying Agent
to collect principal  payments.  The Company shall pay principal and interest in
money of the  United  States  that at the time of  payment  is legal  tender for
payment of public and  private  debts  ("U.S.  Legal  Tender").  The Company may
deliver  any such  interest  payment to the  Paying  Agent or to a Holder at the
Holder's registered address.

     (3) Paying  Agent and  Registrar.  Initially,  Bankers  Trust  Company (the
"Trustee")  will act as Paying Agent and  Registrar.  The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.

     (4) Indenture. The Company issued the Notes under an Indenture, dated as of
March 15, 2002 (the "Indenture"),  among the Company, the Subsidiary  Guarantors
and the Trustee.  This Note is one of a duly authorized  issue of Exchange Notes
of the Company  designated  as its 9.60%  Senior  Notes due 2012,  Series B (the
"Exchange  Notes").  The Notes  include the 9.60 % Notes due 2012 (the  "Initial
Notes"),  the Exchange Notes,  issued in exchange for the Initial Notes pursuant
to the  Registration  Rights  Agreement and any  Additional  Notes.  The Initial
Notes, any Additional Notes and the Exchange Notes are treated as a single class
of securities under the Indenture.  Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the  Indenture and those made part of the Indenture by reference
to the Trust  Indenture  Act of 1939 (15 U.S.  Code  ss.ss.  77aaa-77bbbb)  (the
"TIA"), as in effect on the date of the Indenture.  Notwithstanding  anything to
the  contrary  herein,  the Notes are subject to all such terms,  and Holders of
Notes are referred to the  Indenture  and said Act for a statement of them.  The
Notes are general unsecured obligations of the Company.  Payment on each Note is
guaranteed on a senior basis by the Subsidiary Guarantors pursuant to Article 12
of the Indenture. Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture,  as the same may be amended from time
to time in accordance with its terms.

                                   B-2
<page>

     (5) Redemption.  The Notes will be redeemable,  at the Company's option, in
whole at any time or in part from time to time,  on and  after  March 15,  2007,
upon not less than 30 nor more than 60 days' notice, at the following Redemption
Prices  (expressed as percentages of the principal  amount  thereof) if redeemed
during the  twelve-month  period  commencing  on March 15 of the years set forth
below,  plus, in each case,  accrued  interest,  if any,  thereon to the date of
redemption:

    Year                                                   Percentage

    2007............................                        104.800%
    2008............................                        103.200%
    2009............................                        101.600%
    2010 and thereafter.............                        100.000%

     At any time,  or from  time to time,  on or prior to March  15,  2005,  the
Company may, at its option, use all or a portion of the net cash proceeds of one
or more Equity  Offerings to redeem up to 35% of the aggregate  principal amount
of the Notes  originally  issued at a redemption  price equal to 109.600% of the
aggregate  principal amount of the Notes to be redeemed,  plus accrued interest,
if any, thereon to the date of redemption;  provided, however, that at least 65%
of the aggregate principal amount of Notes originally issued remains outstanding
immediately  after giving effect to any such redemption.  In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company shall
make such  redemption not more than 60 days after the  consummation  of any such
Equity Offering.

     (6) Notice of Redemption.  Notice of redemption  will be mailed at least 30
days but not more than 60 days  before  the  Redemption  Date to each  Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.

     Except as set forth in the  Indenture,  if monies for the redemption of the
Notes called for redemption  shall have been deposited with the Paying Agent for
redemption on such Redemption  Date,  then,  unless the Company  defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption  will cease to bear interest from and after such  Redemption Date
and the only right of the  Holders  of such Notes will be to receive  payment of
the Redemption Price plus accrued interest, if any.

     (7) Offers to Purchase.  Sections  4.15 and 4.16 of the  Indenture  provide
that,  after  certain  Asset  Sales (as defined in the  Indenture)  and upon the
occurrence of a Change of Control (as defined in the Indenture),  and subject to
further  limitations  contained  therein,  the  Company  will  make an  offer to
purchase  certain  amounts of the Notes in accordance  with the  procedures  set
forth in the Indenture.

     (8) Denominations;  Transfer;  Exchange.  The Notes are in registered form,
without   coupons,   and  (except  Notes  issued  as  payment  of  Interest)  in
denominations  of $1,000  and  integral  multiples  of  $1,000.  A Holder  shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar  may require a Holder,  among  other  things,  to furnish  appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental  charges  payable  in  connection  therewith  as  permitted  by the
Indenture.  The  Registrar  need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.

                                      B-3
<page>

     (9) Persons Deemed Owners. The registered Holder of a Note shall be treated
as the owner of it for all purposes.

     (10)  Unclaimed  Money.  If money for the payment of  principal or interest
remains  unclaimed  for one year,  the Trustee and the Paying Agent will pay the
money back to the  Company.  After that,  all  liability of the Trustee and such
Paying Agent with respect to such money shall cease.

     (11) Discharge Prior to Redemption or Maturity.  If the Company at any time
deposit  with the  Trustee  U.S.  Legal  Tender or U.S.  Government  Obligations
sufficient to pay the  principal of and interest on the Notes to redemption  and
comply with the other provisions of the Indenture relating thereto,  the Company
will be  discharged  from  certain  provisions  of the  Indenture  and the Notes
(including  certain  covenants,  including,  under  certain  circumstances,  its
obligation  to pay the  principal  of and  interest  on the  Notes  but  without
affecting the rights of the Holders to receive such amounts from such deposit).

     (12) Amendment; Supplement; Waiver. Subject to certain exceptions set forth
in the Indenture, the Indenture or the Notes may be amended or supplemented with
the  written  consent of the  Holders of not less than a majority  in  aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or  noncompliance  with any  provision  may be waived  with the  written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding.  Without notice to or consent of any Holder,  the
parties  thereto may amend or  supplement  the  Indenture or the Notes to, among
other  things,  cure  any  ambiguity,  defect  or  inconsistency,   provide  for
uncertificated  Notes in addition to or in place of certificated  Notes,  comply
with any  requirements  of the  Commission  in order to effect or  maintain  the
qualification  of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely  affect the rights of
any Holder of a Note.

     (13) Restrictive  Covenants.  The Indenture imposes certain  limitations on
the ability of the  Company  and the  Restricted  Subsidiaries  to,  among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness,  make certain Investments, create or incur liens,
enter into  transactions  with  Affiliates,  create  dividend  or other  payment
restrictions affecting Restricted  Subsidiaries,  issue Preferred Stock of their
Restricted Subsidiaries,  and on the ability of the Company and their Restricted
Subsidiaries  to merge or  consolidate  with any other  Person or sell,  assign,
transfer,  lease, convey or otherwise dispose of all or substantially all of the
Company's  and  their  Restricted  Subsidiaries'  assets  or  adopt  a  plan  of
liquidation.   Such   limitations   are   subject  to  a  number  of   important
qualifications  and exceptions.  Pursuant to Section 4.06 of the Indenture,  the
Company must annually report to the Trustee on compliance with such limitations.

     (14)  Successors.   When  a  successor  assumes,  in  accordance  with  the
Indenture,  all the  obligations  of its  predecessor  under  the  Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.

     (15) Defaults and  Remedies.  Except as set forth in the  Indenture,  if an
Event of Default  occurs and is  continuing,  the  Trustee or the Holders of not
less than 25% in principal  amount of Notes then outstanding may declare all the
Notes to be due and  payable  in the  manner,  at the  time and with the  effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes  except as provided in the  Indenture.  The  Trustee is not  obligated  to
enforce the Indenture or

                                      B-4
<page>

     the Notes unless it has received indemnity  reasonably  satisfactory to it.
The Indenture permits, subject to certain limitations therein provided,  Holders
of a majority in aggregate  principal  amount of the Notes then  outstanding  to
direct the  Trustee  in its  exercise  of any trust or power.  The  Trustee  may
withhold  from  Holders of Notes  notice of any  continuing  Default or Event of
Default  (except a Default in payment of principal or interest when due, for any
reason or a Default in  compliance  with  Article Five of the  Indenture)  if it
determines that withholding notice is in their interest.

     (16) Trustee Dealings with the Company. The Trustee under the Indenture, in
its individual or any other  capacity,  may become the owner or pledgee of Notes
and may otherwise deal with the Company,  their Subsidiaries or their respective
Affiliates as if it were not the Trustee.

     (17) No Recourse Against Others. No partner, director, officer, employee or
stockholder, as such, of the Company or any Subsidiary Guarantor, as such, shall
have  any  liability  for  any  obligations  of the  Company  or any  Subsidiary
Guarantor  under the Notes,  the Indenture,  the Guarantees or the  Registration
Rights Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their  creation.  Each Holder of Notes by accepting a Note waives
and  releases  all  such  liability.  The  waiver  and  release  are part of the
consideration for the issuance of the Notes.

     (18)  Guarantees.  This Note will be  entitled  to the  benefits of certain
Guarantees,  if any,  made for the benefit of the  Holders.  Reference is hereby
made to the Indenture for a statement of the respective  rights,  limitations of
rights,  duties and  obligations  thereunder of the Subsidiary  Guarantors,  the
Trustee and the Holders.

     (19)  Authentication.  This Note  shall not be valid  until the  Trustee or
Authenticating  Agent manually signs the certificate of  authentication  on this
Note.

     (20)  Governing  Law. This Note and the Indenture  shall be governed by and
construed in  accordance  with the laws of the State of New York,  as applied to
contracts  made and performed  within the State of New York,  without  regard to
principles of conflict of laws.  Each of the parties  hereto agrees to submit to
the  jurisdiction  of the  courts  of the  State  of New York in any  action  or
proceeding arising out of or relating to this Note.

     (21) Abbreviations and Defined Terms.  Customary  abbreviations may be used
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common),  TEN ENT (= tenants by the  entireties),  JT TEN (= joint  tenants with
right of  survivorship  and not as tenants in common),  CUST (= Custodian),  and
U/G/M/A (= Uniform Gifts to Minors Act).

     (22)  CUSIP  Numbers.  Pursuant  to a  recommendation  promulgated  by  the
Committee on Uniform Security Identification  Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience  to the Holders of the
Notes. No  representation  is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

     The Company will  furnish to any Holder of a Note upon written  request and
without  charge  a copy  of the  Indenture,  which  has the  text of this  Note.
Requests may be made to: Magnum  Hunter  Resources,  Inc.,  600 East Las Colinas
Blvd., Suite 1100, Irving, Texas 75039.

                                      B-5
<page>

                                 ASSIGNMENT FORM


     If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:

     I or we assign and transfer this Note to:

     ---------------------------------------------------------------

     ---------------------------------------------------------------

     ---------------------------------------------------------------
     (Print or type name,  address  and zip code and social  security  or tax ID
      number of assignee)

     and irrevocably appoint  _______________________________________,  agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.


Dated: _____________________  Signed:___________________________
                                       (Sign exactly as your name appears
                                           on the other side of this Note)

Signature Guarantee:___________________________________________


                                      B-6

<PAGE>

                      [OPTION OF HOLDER TO ELECT PURCHASE]


     If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:

     Section 4.15 [ ]
     Section 4.16 [ ]

     If you  want to elect  to have  only  part of this  Note  purchased  by the
Company  pursuant to Section  4.15 or Section 4.16 of the  Indenture,  state the
amount you elect to have purchased:


$
 -------------------


Dated: _________________
                           ---------------------------------------------------
                                               NOTICE:  The signature on this
                                               assignment must correspond with
                                               the name as it appears upon the
                                               face of the within Note in every
                                               particular without alteration
                                               or enlargement or any change
                                               whatsoever and be guaranteed.


Signature Guarantee:  _____________________________


                                      B-7

<PAGE>

                                                                       EXHIBIT C


                            Form of Certificate To Be
                          Delivered in Connection with
                    Transfers to Non-QIB Accredited Investors


                                                         [             ], [    ]


Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust and Agency Services

Ladies and Gentlemen:

     In  connection  with our proposed  purchase of 9.60 % Senior Notes due 2012
(the "Notes") of Magnum Hunter Resources, Inc. (the "Company"), we confirm that:

     1. We understand  that any  subsequent  transfer of the Notes is subject to
certain  restrictions and conditions set forth in the indenture  relating to the
Notes (the  "Indenture")  and the undersigned  agrees to be bound by, and not to
resell,  pledge or otherwise  transfer the Notes except in compliance with, such
restrictions  and  conditions  and the  Securities  Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.

     2. We  understand  that  the  offer  and  sale of the  Notes  have not been
registered  under the  Securities  Act, and that the Notes may not be offered or
sold  within the United  States or to, or for the  account or benefit  of,  U.S.
persons  except as permitted in the  following  sentence.  We agree,  on our own
behalf  and on behalf of any  accounts  for which we are  acting as  hereinafter
stated,  that if we should sell any Notes, we will do so only (i) to the Company
or any subsidiary thereof, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified  institutional  buyer" (as defined
in Rule 144A promulgated  under the Securities Act) in compliance with Rule 144A
under the  Securities  Act,  (iii)  inside  the  United  States  to  "accredited
investors" (as defined in Rule  501(a)(1),  (2), (3) or (7) under the Securities
Act), that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S.  broker-dealer)  to the Trustee (as  defined in the  Indenture)  a signed
letter  containing  certain  representations  and  agreements  relating  to  the
restrictions  on transfer of the Notes (the form of which letter can be obtained
from  the  Trustee),   (iv)  in  accordance  with  another  exemption  from  the
registration  requirements  of the  Securities Act (and based upon an opinion of
counsel if the Company so requests), (v) outside the United States in accordance
with Rule 904 of  Regulation  S  promulgated  under  the  Securities  Act,  (vi)
pursuant  to the  exemption  from  registration  provided  by Rule 144 under the
Securities Act (if  available),  or (vii) pursuant to an effective  registration
statement  under the  Securities  Act,  and we  further  agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.

                                      C-1
<page>

     3. We  understand  that,  on any proposed  resale of any Notes,  we will be
required to furnish to the Trustee,  and the Company such  certification,  legal
opinions and other information as the Trustee and Magnum may reasonably  require
to confirm that the proposed sale complies with the foregoing  restrictions.  We
further  understand  that the  Notes  purchased  by us will bear a legend to the
foregoing effect.

     4.  We are an  institutional  "accredited  investor"  (as  defined  in Rule
501(a)(1),  (2), (3) or (7) of Regulation D under the  Securities  Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating  the merits and risks of our  investment in the Notes,  and we and
any accounts for which we are acting are each able to bear the economic  risk of
our or their investment, as the case may be.

     5. We are acquiring the Notes purchased by us for our account or for one or
more accounts (each of which is an  institutional  "accredited  investor") as to
each of which we exercise sole investment discretion.

     You and the  Company  and others are  entitled to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative  or legal proceeding or official inquiry
with respect to the matters covered hereby.

                                              Very truly yours,

                                              [Name of Transferee]



                                               By:
                                                   --------------------------
                                                   Name:
                                                   Title:

                                      C-2

<PAGE>
                                                                       EXHIBIT D


                       Form of Certificate To Be Delivered
                          in Connection with Transfers
                            Pursuant to Regulation S


                                                           [           ], [    ]


Bankers Trust Company
Four Albany Street
New York, NY  10006
Attn: Corporate Trust and Agency Services


     Re: Magnum Hunter  Resources,  Inc. (the "Company") 9.60 % Senior Notes due
2012 (the "Notes")

Ladies and Gentlemen:

     In connection with our proposed sale of $[ ] aggregate  principal amount of
the  Notes,  we  confirm  that such sale has been  effected  pursuant  to and in
accordance with  Regulation S under the U.S.  Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, we represent that:

     (1) the offer of the Notes was not made to a person in the United States;

     (2) either (a) at the time the buy offer was originated, the transferee was
outside the United States or we and any person  acting on our behalf  reasonably
believed  that  the  transferee  was  outside  the  United  States,  or (b)  the
transaction  was  executed  in, on or through  the  facilities  of a  designated
offshore  securities  market and neither we nor any person  acting on our behalf
knows  that the  transaction  has been  prearranged  with a buyer in the  United
States;

     (3) no  directed  selling  efforts  have been made in the United  States in
contravention  of the  requirements  of Rule 903 or Rule 904 of Regulation S, as
applicable;

     (4)  the  transaction  is not  part  of a  plan  or  scheme  to  evade  the
registration requirements of the Securities Act; and

     (5) we have advised the transferee of the transfer restrictions  applicable
to the Notes.

     You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry  with  respect  to the  matters  covered  hereby.  Terms  used  in  this
certificate have the meanings set forth in Regulation S.

                                      D-1
<page>

                                                     Very truly yours,

                                                     [Name of Transferor]



                                                     By:
                                                        -----------------------
                                                           Authorized Signature

                                      D-2

<PAGE>

                                                                       EXHIBIT E


                                    GUARANTEE


     For value received, the undersigned hereby unconditionally  guarantees,  as
principal  obligor and not only as a surety, to the Holder of this Note the cash
payments in United States dollars of principal of, premium, if any, and interest
on this Note (and including  Additional Interest payable thereon) in the amounts
and at the times when due and  interest on the overdue  principal,  premium,  if
any,  and  interest,  if any,  of this  Note,  if  lawful,  and the  payment  or
performance  of all other  obligations of the Company under the Indenture or the
Notes,  to the Holder of this Note and the Trustee,  all in accordance  with and
subject  to the  terms  and  limitations  of this  Note,  Article  Twelve of the
Indenture and this Guarantee. This Guarantee will become effective in accordance
with Article  Twelve of the Indenture and its terms shall be evidenced  therein.
The validity and  enforceability  of any Guarantee  shall not be affected by the
fact that it is not affixed to any particular Note.  Capitalized  terms used but
not defined  herein  shall have the meanings  ascribed to them in the  Indenture
dated as of March 15,  2002,  among  Magnum  Hunter  Resources,  Inc.,  a Nevada
corporation, the Subsidiary Guarantors and Bankers Trust Company as trustee (the
"Trustee"), as amended or supplemented (the "Indenture").

     The  obligations  of the  undersigned  to the  Holders  of Notes and to the
Trustee  pursuant to this Guarantee and the Indenture are expressly set forth in
Article  Twelve of the  Indenture  and reference is hereby made to the Indenture
for the precise terms of the  Guarantee  and all of the other  provisions of the
Indenture to which this Guarantee relates.

     THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT  GIVING  EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW. Each Subsidiary Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or  proceeding  arising out of
or relating to this Guarantee.

     This  Guarantee  is  subject  to  release  upon the  terms set forth in the
Indenture.

                                      E-1

<PAGE>

     IN WITNESS WHEREOF,  each Subsidiary  Guarantor has caused its Guarantee to
be duly executed.


Date:  ____________________


                                        [NAME OF SUBSIDIARY GUARANTOR],
                                        as Guarantor


                                        By:
                                           ---------------------------------
                                           Name:
                                           Title:


                                      E-2

<PAGE>

                                                                       EXHIBIT F


                       Form of Certificate To Be Delivered
                      in Connection with Certain Transfers
                                                                        [ ], [ ]


Bankers Trust Company
Four Albany Street
New York, NY  10006
Attn: Corporate Trust and Agency Services


     Re: Magnum Hunter  Resources,  Inc. (the "Company") 9.60 % Senior Notes due
2012 (the "Notes")

Ladies and Gentlemen:

     In connection  with any transfer of this Note  occurring  prior to the date
which is the earlier of (i) the date of the declaration by the Commission of the
effectiveness  of a registration  statement under the Securities Act of 1933, as
amended  (the   "Securities   Act")   covering   resales  of  this  Note  (which
effectiveness  shall not have been  suspended or  terminated  at the date of the
transfer)  and (ii) [ ], the  undersigned  confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer:

                                   [Check One]

     (1) __ to the Company or a subsidiary thereof; or

     (2) __ pursuant to and in  compliance  with Rule 144A under the  Securities
Act of 1933, as amended; or

     (3) __ to an  institutional  "accredited  investor"  (as  defined  in  Rule
501(a)(1),  (2), (3) or (7) under the  Securities  Act of 1933, as amended) that
has furnished to the Trustee a signed letter containing certain  representations
and agreements (the form of which letter can be obtained from the Trustee); or

     (4) __ outside the United states to a "foreign  person" in compliance  with
Rule 904 of Regulation S under the Securities Act of 1933, as amended; or

     (5) __ pursuant to the  exemption  from  registration  provided by Rule 144
under the Securities Act of 1933, as amended; or

     (6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or

     (7) __  pursuant  to  another  available  exemption  from the  registration
requirements of the Securities Act of 1933, as amended.

                                      F-1

<PAGE>

     and unless the box below is checked,  the  undersigned  confirms  that such
Note is not being  transferred  to an  "affiliate"  of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):

     [ ] The transferee is an Affiliate of the Company.

     Unless one of the items is checked, the Trustee will refuse to register any
of the Notes evidenced by this  certificate in the name of any person other than
the  registered  Holder  thereof  unless  and until the  conditions  to any such
transfer of  registration  set forth herein and in Section 2.17 of the Indenture
shall have been satisfied;  provided, however, that if item (3), (4), (5) or (7)
is checked,  the Company or the Trustee may require,  prior to  registering  any
such  transfer  of the  Notes,  in their sole  discretion,  such  written  legal
opinions,  certifications (including an investment letter in the case of box (3)
or (4)) and other  information  as the  Trustee or the Company  have  reasonably
requested to confirm that such  transfer is being made  pursuant to an exemption
from, or in a transaction not subject to, the  registration  requirements of the
Securities Act of 1933, as amended.

Dated: _____________________  Signed:__________________________________
                                     (Sign exactly as your name appears
                                         on the other side of this Note)

Signature Guarantee:___________________________________________


              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

     The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended and
is  aware  that  the  sale to it is  being  made in  reliance  on Rule  144A and
acknowledges that it has received such information  regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such  information  and that it is aware that the  transferor is relying upon the
undersigned's  foregoing  representations  in order to claim the exemption  from
registration provided by Rule 144A.

Dated: __________________     ________________________________________
                              NOTICE:  To be executed by an executive officer


                                      F-2